Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Jan. 29, 2016 | Jun. 30, 2015 | |
Entity Registrant Name | TALEN ENERGY CORPORATION | ||
Entity Central Index Key | 1,622,536 | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 128,526,720 | ||
Entity Public Float | $ 1,429,161,711 | ||
Talen Energy Supply | |||
Entity Registrant Name | TALEN ENERGY SUPPLY, LLC | ||
Entity Central Index Key | 1,161,976 | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | Yes | ||
Entity Current Reporting Status | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 0 | ||
Entity Public Float | $ 0 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Revenues | |||
Wholesale energy | $ 2,828 | $ 2,653 | $ 2,890 |
Wholesale energy to affiliate | 14 | 84 | 51 |
Retail energy | 1,095 | 1,243 | 1,027 |
Energy-related businesses | 544 | 601 | 527 |
Total Operating Revenues | 4,481 | 4,581 | 4,495 |
Operation | |||
Fuel | 1,194 | 1,196 | 1,048 |
Energy purchases | 676 | 1,054 | 1,153 |
Operation and maintenance | 1,052 | 1,007 | 961 |
Loss on lease termination | 0 | 0 | 697 |
Impairments | 657 | 0 | 65 |
Depreciation | 356 | 297 | 299 |
Taxes, other than income | 65 | 57 | 53 |
Energy-related businesses | 520 | 573 | 512 |
Total Operating Expenses | 4,520 | 4,184 | 4,788 |
Operating Income (Loss) | (39) | 397 | (293) |
Other Income (Expense) - net | (118) | 30 | 32 |
Interest Expense | 211 | 124 | 159 |
Income (Loss) from Continuing Operations Before Income Taxes | (368) | 303 | (420) |
Income Taxes | (27) | 116 | (159) |
Income (Loss) from Continuing Operations After Income Taxes | (341) | 187 | (261) |
Income (Loss) from Discontinued Operations (net of income taxes) | 0 | 223 | 32 |
Net Income (Loss) | (341) | 410 | (229) |
Net Income (Loss) Attributable to Noncontrolling Interests | 0 | 0 | 1 |
Net Income (Loss) Attributable to Member | (341) | 410 | (230) |
Amounts Attributable to Member: | |||
Income (Loss) from Continuing Operations After Income Taxes | (341) | 187 | (262) |
Income (Loss) from Discontinued Operations (net of income taxes) | $ 0 | $ 223 | $ 32 |
Earnings Per Share of Common Stock - Basic: | |||
Income (Loss) from continuing operations after income taxes (in dollars per share) | $ (3.10) | $ 2.24 | $ (3.13) |
Income (Loss) from discontinued operations (net of income taxes) (in dollars per share) | 0 | 2.67 | 0.38 |
Net Income (Loss) (in dollars per share) | (3.10) | 4.91 | (2.75) |
Earnings Per Share of Common Stock - Diluted: | |||
Income (Loss) from continuing operations (in dollars per share) | (3.10) | 2.24 | (3.13) |
Income (Loss) from discontinued operations (net of income taxes) (in dollars per share) | 0 | 2.67 | 0.38 |
Net Income (Loss) (in dollars per share) | $ (3.10) | $ 4.91 | $ (2.75) |
Weighted-Average Shares of Common Stock Outstanding (in thousands) | |||
Basic (in shares) | 109,898 | 83,524 | 83,524 |
Diluted (in shares) | 109,898 | 83,524 | 83,524 |
Talen Energy Supply | |||
Operating Revenues | |||
Wholesale energy | $ 2,828 | $ 2,653 | $ 2,890 |
Wholesale energy to affiliate | 14 | 84 | 51 |
Retail energy | 1,095 | 1,243 | 1,027 |
Energy-related businesses | 544 | 601 | 527 |
Total Operating Revenues | 4,481 | 4,581 | 4,495 |
Operation | |||
Fuel | 1,194 | 1,196 | 1,048 |
Energy purchases | 676 | 1,054 | 1,153 |
Operation and maintenance | 1,052 | 1,007 | 961 |
Loss on lease termination | 0 | 0 | 697 |
Impairments | 657 | 0 | 65 |
Depreciation | 356 | 297 | 299 |
Taxes, other than income | 65 | 57 | 53 |
Energy-related businesses | 520 | 573 | 512 |
Total Operating Expenses | 4,520 | 4,184 | 4,788 |
Operating Income (Loss) | (39) | 397 | (293) |
Other Income (Expense) - net | (118) | 30 | 32 |
Interest Expense | 211 | 124 | 159 |
Income (Loss) from Continuing Operations Before Income Taxes | (368) | 303 | (420) |
Income Taxes | (27) | 116 | (159) |
Income (Loss) from Continuing Operations After Income Taxes | (341) | 187 | (261) |
Income (Loss) from Discontinued Operations (net of income taxes) | 0 | 223 | 32 |
Net Income (Loss) | (341) | 410 | (229) |
Net Income (Loss) Attributable to Noncontrolling Interests | 0 | 0 | 1 |
Net Income (Loss) Attributable to Member | (341) | 410 | (230) |
Amounts Attributable to Member: | |||
Income (Loss) from Continuing Operations After Income Taxes | (341) | 187 | (262) |
Income (Loss) from Discontinued Operations (net of income taxes) | $ 0 | $ 223 | $ 32 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net income (loss) | $ (341) | $ 410 | $ (229) |
Amounts arising during the period - gains (losses), net of tax (expense) benefit: | |||
Available-for-sale securities, net of tax | (6) | 35 | 67 |
Defined benefit plans: | |||
Prior service costs, net of tax | (3) | 8 | 2 |
Net actuarial gain, net of tax | 46 | (120) | 71 |
Reclassifications from AOCI - (gains) losses, net of tax expense (benefit): | |||
Available-for-sale securities, net of tax | (2) | (6) | (6) |
Qualifying derivatives, net of tax | (19) | (25) | (123) |
Defined benefit plans: | |||
Prior service costs, net of tax | (1) | 3 | 4 |
Net actuarial loss, net of tax | (18) | 5 | 14 |
Total other comprehensive income (loss) | (3) | (100) | 29 |
Comprehensive income (loss) | (344) | 310 | (200) |
Comprehensive income attributable to noncontrolling interests | 0 | 0 | 1 |
Comprehensive income (loss) attributable to member | (344) | 310 | (201) |
Talen Energy Supply | |||
Net income (loss) | (341) | 410 | (229) |
Amounts arising during the period - gains (losses), net of tax (expense) benefit: | |||
Available-for-sale securities, net of tax | (6) | 35 | 67 |
Defined benefit plans: | |||
Prior service costs, net of tax | (3) | 8 | 2 |
Net actuarial gain, net of tax | 46 | (120) | 71 |
Reclassifications from AOCI - (gains) losses, net of tax expense (benefit): | |||
Available-for-sale securities, net of tax | (2) | (6) | (6) |
Qualifying derivatives, net of tax | (19) | (25) | (123) |
Defined benefit plans: | |||
Prior service costs, net of tax | (1) | 3 | 4 |
Net actuarial loss, net of tax | (18) | 5 | 14 |
Total other comprehensive income (loss) | (3) | (100) | 29 |
Comprehensive income (loss) | (344) | 310 | (200) |
Comprehensive income attributable to noncontrolling interests | 0 | 0 | 1 |
Comprehensive income (loss) attributable to member | $ (344) | $ 310 | $ (201) |
CONSOLIDATED STATEMENTS OF COM4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Tax effect of available for sale securities arising during the period | $ 5 | $ (40) | $ (72) |
Tax effect of prior service costs for defined benefit plans | 1 | (6) | (1) |
Tax effect of net actuarial gain for defined benefit plans | (30) | 83 | (49) |
Tax effect of available-for-sale securities reclassified from accumulated other comprehensive income (loss) | 2 | 7 | 4 |
Tax effect of qualifying derivatives reclassified from accumulated other comprehensive income (loss) | 12 | 17 | 84 |
Tax effect of prior service costs reclassified from accumulated other comprehensive income (loss) | 0 | (1) | (3) |
Tax effect of net actuarial loss reclassified from accumulated other comprehensive income (loss) | 11 | (4) | (10) |
Talen Energy Supply | |||
Tax effect of available for sale securities arising during the period | 5 | (40) | (72) |
Tax effect of prior service costs for defined benefit plans | 1 | (6) | (1) |
Tax effect of net actuarial gain for defined benefit plans | (30) | 83 | (49) |
Tax effect of available-for-sale securities reclassified from accumulated other comprehensive income (loss) | 2 | 7 | 4 |
Tax effect of qualifying derivatives reclassified from accumulated other comprehensive income (loss) | 12 | 17 | 84 |
Tax effect of prior service costs reclassified from accumulated other comprehensive income (loss) | 0 | (1) | (3) |
Tax effect of net actuarial loss reclassified from accumulated other comprehensive income (loss) | $ 11 | $ (4) | $ (10) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flows from Operating Activities | |||
Net income (loss) | $ (341) | $ 410 | $ (229) |
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract] | |||
Pre-tax gain from the sale of Montana hydroelectric generation business | 0 | (315) | 0 |
Depreciation | 356 | 313 | 318 |
Amortization | 222 | 163 | 156 |
Defined benefit plans - expense | 50 | 42 | 51 |
Deferred income taxes and investment tax credits | (61) | (26) | (296) |
Impairment of assets | 662 | 20 | 65 |
Unrealized (gains) losses on derivatives, and other hedging activities | (119) | 4 | 171 |
Loss on lease termination | 0 | 0 | 426 |
Other | 46 | 36 | 2 |
Change in current assets and current liabilities | |||
Accounts receivable | 115 | 17 | 23 |
Accounts payable | (147) | 2 | (56) |
Unbilled revenues | 58 | 68 | 83 |
Fuel, materials and supplies | 12 | (97) | (31) |
Prepayments | 31 | (53) | (5) |
Counterparty collateral | 63 | (17) | (81) |
Price risk management assets and liabilities | (14) | (30) | 7 |
Taxes payable | (23) | (3) | (31) |
Other | (49) | (40) | (16) |
Other operating activities | |||
Defined benefit plans - funding | (74) | (35) | (113) |
Other assets | 4 | 3 | (4) |
Other liabilities | (23) | 0 | (30) |
Net cash provided by operating activities | 768 | 462 | 410 |
Cash Flows from Investing Activities | |||
Expenditures for property, plant and equipment | (451) | (416) | (583) |
Proceeds from the sale of Montana hydroelectric generation business | 0 | 900 | 0 |
Expenditures for intangible assets | (70) | (46) | (42) |
Acquisition of MACH Gen | (603) | 0 | 0 |
Purchases of nuclear plant decommissioning trust investments | (196) | (170) | (159) |
Proceeds from the sale of nuclear plant decommissioning trust investments | 180 | 154 | 144 |
Proceeds from the sale of the Renewable business | 116 | 0 | 0 |
Proceeds from the receipt of grants | 0 | 164 | 3 |
Net (increase) decrease in restricted cash and cash equivalents | 87 | (108) | (22) |
Other investing activities | 22 | 19 | 28 |
Net cash provided by (used in) investing activities | (915) | 497 | (631) |
Cash Flows from Financing Activities | |||
Issuance of long-term debt | 600 | 0 | 0 |
Retirement of long-term debt | (335) | (309) | (747) |
Contributions from member | 82 | 739 | 1,577 |
Distributions to member | (217) | (1,906) | (408) |
Net increase (decrease) in short-term debt | (162) | 630 | (356) |
Other financing activities | (32) | 0 | (19) |
Net cash provided by (used in) financing activities | (64) | (846) | 47 |
Net Increase (Decrease) in Cash and Cash Equivalents | (211) | 113 | (174) |
Cash and Cash Equivalents at Beginning of Period | 352 | 239 | 413 |
Cash and Cash Equivalents at End of Period | 141 | 352 | 239 |
Supplemental Disclosures of Cash Flow Information | |||
Interest - net of amount capitalized | 169 | 122 | 157 |
Income taxes - net | 5 | 310 | 189 |
Talen Energy Supply | |||
Cash Flows from Operating Activities | |||
Net income (loss) | (341) | 410 | (229) |
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract] | |||
Pre-tax gain from the sale of Montana hydroelectric generation business | 0 | (315) | 0 |
Depreciation | 356 | 313 | 318 |
Amortization | 222 | 163 | 156 |
Defined benefit plans - expense | 50 | 42 | 51 |
Deferred income taxes and investment tax credits | (61) | (26) | (296) |
Impairment of assets | 662 | 20 | 65 |
Unrealized (gains) losses on derivatives, and other hedging activities | (119) | 4 | 171 |
Loss on lease termination | 0 | 0 | 426 |
Other | 46 | 36 | 2 |
Change in current assets and current liabilities | |||
Accounts receivable | 115 | 17 | 23 |
Accounts payable | (147) | 2 | (56) |
Unbilled revenues | 58 | 68 | 83 |
Fuel, materials and supplies | 12 | (97) | (31) |
Prepayments | 31 | (53) | (5) |
Counterparty collateral | 63 | (17) | (81) |
Price risk management assets and liabilities | (14) | (30) | 7 |
Taxes payable | (23) | (3) | (31) |
Other | (49) | (40) | (16) |
Other operating activities | |||
Defined benefit plans - funding | (74) | (35) | (113) |
Other assets | 4 | 3 | (4) |
Other liabilities | (23) | 0 | (30) |
Net cash provided by operating activities | 768 | 462 | 410 |
Cash Flows from Investing Activities | |||
Expenditures for property, plant and equipment | (451) | (416) | (583) |
Proceeds from the sale of Montana hydroelectric generation business | 0 | 900 | 0 |
Expenditures for intangible assets | (70) | (46) | (42) |
Acquisition of MACH Gen | (603) | 0 | 0 |
Purchases of nuclear plant decommissioning trust investments | (196) | (170) | (159) |
Proceeds from the sale of nuclear plant decommissioning trust investments | 180 | 154 | 144 |
Proceeds from the sale of the Renewable business | 116 | 0 | 0 |
Proceeds from the receipt of grants | 0 | 164 | 3 |
Net (increase) decrease in restricted cash and cash equivalents | 87 | (108) | (22) |
Other investing activities | 22 | 19 | 28 |
Net cash provided by (used in) investing activities | (915) | 497 | (631) |
Cash Flows from Financing Activities | |||
Issuance of long-term debt | 600 | 0 | 0 |
Retirement of long-term debt | (335) | (309) | (747) |
Contributions from member | 82 | 739 | 1,577 |
Distributions to member | (219) | (1,906) | (408) |
Net increase (decrease) in short-term debt | (162) | 630 | (356) |
Other financing activities | (30) | 0 | (19) |
Net cash provided by (used in) financing activities | (64) | (846) | 47 |
Net Increase (Decrease) in Cash and Cash Equivalents | (211) | 113 | (174) |
Cash and Cash Equivalents at Beginning of Period | 352 | 239 | 413 |
Cash and Cash Equivalents at End of Period | 141 | 352 | 239 |
Supplemental Disclosures of Cash Flow Information | |||
Interest - net of amount capitalized | 169 | 122 | 157 |
Income taxes - net | $ 5 | $ 310 | $ 189 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | |
Current Assets | |||
Cash and cash equivalents | $ 141 | $ 352 | |
Restricted cash and cash equivalents | 106 | 176 | |
Accounts receivable (less reserve:) | |||
Customer | 205 | 186 | |
Other | 62 | 103 | |
Accounts receivable from affiliates | 0 | 36 | |
Unbilled revenues | 160 | 218 | |
Fuel, materials and supplies | 508 | 455 | |
Prepayments | 52 | 70 | |
Price risk management assets | 562 | 1,079 | |
Assets held for sale | 954 | 0 | |
Other current assets | 12 | 26 | |
Total Current Assets | 2,762 | 2,701 | |
Investments | |||
Nuclear plant decommissioning trust funds | 951 | 950 | |
Other investments | 25 | 30 | |
Total Investments | 976 | 980 | |
Property, Plant and Equipment | |||
Generation | 13,468 | 11,318 | |
Nuclear fuel | 652 | 624 | |
Other | 342 | 293 | |
Less: accumulated depreciation | 6,411 | 6,242 | |
Property, plant and equipment, net | 8,051 | 5,993 | |
Construction work in progress | 536 | 443 | |
Total Property, Plant and Equipment, net | 8,587 | 6,436 | |
Other Noncurrent Assets | |||
Goodwill | 0 | 72 | |
Other intangibles | 310 | 257 | |
Price risk management assets | 131 | 239 | |
Other noncurrent assets | 60 | 75 | |
Total Other Noncurrent Assets | 501 | 643 | |
Total Assets | 12,826 | 10,760 | |
Current Liabilities | |||
Short-term debt | 608 | 630 | |
Long-term debt due within one year | 399 | 535 | |
Accounts payable | 291 | 361 | |
Accounts payable to affiliates | 0 | 50 | |
Taxes | 16 | 28 | |
Interest | 43 | 16 | |
Price risk management liabilities | 431 | 1,024 | |
Liabilities held for sale | 33 | 0 | |
Other current liabilities | 267 | 246 | |
Total Current Liabilities | 2,088 | 2,890 | |
Long-term Debt | 3,804 | 1,683 | |
Deferred Credits and Other Noncurrent Liabilities | |||
Deferred income taxes | 1,587 | 1,223 | |
Investment tax credits | 15 | 27 | |
Price risk management liabilities | 108 | 193 | |
Accrued pension obligations | 340 | 299 | |
Asset retirement obligations | 490 | 415 | |
Other deferred credits and noncurrent liabilities | 91 | 123 | |
Total Deferred Credits and Other Noncurrent Liabilities | $ 2,631 | $ 2,280 | |
Commitments and Contingent Liabilities | |||
Equity | |||
Predecessor Member's Equity | [1] | $ 0 | $ 3,930 |
Common Stock - $0.001 par value | [2] | 0 | 0 |
Additional paid-in capital | 4,702 | 0 | |
Accumulated deficit | (373) | 0 | |
Accumulated other comprehensive income (loss) | (26) | (23) | |
Total Equity | 4,303 | 3,907 | |
Total Liabilities and Equity | 12,826 | 10,760 | |
Talen Energy Supply | |||
Current Assets | |||
Cash and cash equivalents | 141 | 352 | |
Restricted cash and cash equivalents | 106 | 176 | |
Accounts receivable (less reserve:) | |||
Customer | 205 | 186 | |
Other | 62 | 103 | |
Accounts receivable from affiliates | 0 | 36 | |
Unbilled revenues | 160 | 218 | |
Fuel, materials and supplies | 508 | 455 | |
Prepayments | 52 | 70 | |
Price risk management assets | 562 | 1,079 | |
Assets held for sale | 954 | 0 | |
Other current assets | 12 | 26 | |
Total Current Assets | 2,762 | 2,701 | |
Investments | |||
Nuclear plant decommissioning trust funds | 951 | 950 | |
Other investments | 25 | 30 | |
Total Investments | 976 | 980 | |
Property, Plant and Equipment | |||
Generation | 13,468 | 11,318 | |
Nuclear fuel | 652 | 624 | |
Other | 342 | 293 | |
Less: accumulated depreciation | 6,411 | 6,242 | |
Property, plant and equipment, net | 8,051 | 5,993 | |
Construction work in progress | 536 | 443 | |
Total Property, Plant and Equipment, net | 8,587 | 6,436 | |
Other Noncurrent Assets | |||
Goodwill | 0 | 72 | |
Other intangibles | 310 | 257 | |
Price risk management assets | 131 | 239 | |
Other noncurrent assets | 60 | 75 | |
Total Other Noncurrent Assets | 501 | 643 | |
Total Assets | 12,826 | 10,760 | |
Current Liabilities | |||
Short-term debt | 608 | 630 | |
Long-term debt due within one year | 399 | 535 | |
Accounts payable | 291 | 361 | |
Accounts payable to affiliates | 0 | 50 | |
Taxes | 16 | 28 | |
Interest | 43 | 16 | |
Price risk management liabilities | 431 | 1,024 | |
Liabilities held for sale | 33 | 0 | |
Other current liabilities | 267 | 246 | |
Total Current Liabilities | 2,088 | 2,890 | |
Long-term Debt | 3,804 | 1,683 | |
Deferred Credits and Other Noncurrent Liabilities | |||
Deferred income taxes | 1,587 | 1,223 | |
Investment tax credits | 15 | 27 | |
Price risk management liabilities | 108 | 193 | |
Accrued pension obligations | 340 | 299 | |
Asset retirement obligations | 490 | 415 | |
Other deferred credits and noncurrent liabilities | 91 | 123 | |
Total Deferred Credits and Other Noncurrent Liabilities | $ 2,631 | $ 2,280 | |
Commitments and Contingent Liabilities | |||
Equity | |||
Member's Equity | $ 4,303 | $ 3,907 | |
Total Liabilities and Equity | $ 12,826 | $ 10,760 | |
[1] | Represents Talen Energy Supply's predecessor member's equity prior to the June 1, 2015 spinoff transaction. Upon completion of the spinoff, the predecessor member's equity was transferred to Talen Energy Corporation's additional paid-in capital. See Note 1 for additional information on the spinoff. | ||
[2] | 1,000,000 shares authorized; 128,509 shares issued and outstanding at December 31, 2015. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts receivable reserve for uncollectible accounts | $ 1 | $ 2 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | |
Common stock, shares issued (in shares) | 128,509,000 | |
Common stock, shares outstanding (in shares) | 128,509,000 | |
Talen Energy Supply | ||
Accounts receivable reserve for uncollectible accounts | $ 1 | $ 2 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Thousands, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Additional paid-in capital | AOCI | Non-controlling Interests | Predecessor Member's Equity | Talen Energy Supply | Talen Energy SupplyNon-controlling Interests | Talen Energy SupplyPredecessor Member's Equity | ||||
Beginning balance at Dec. 31, 2012 | $ 3,848 | $ 18 | $ 3,830 | |||||||||||
Beginning balance at Dec. 31, 2012 | $ 3,848 | $ 48 | $ 18 | $ 3,782 | [1] | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net income (loss) | (229) | 1 | (230) | [1] | (229) | 1 | (230) | |||||||
Other comprehensive income (loss) | 29 | 29 | 0 | [1] | 29 | 29 | ||||||||
Distributions to predecessor member | (427) | (19) | (408) | [1] | (427) | (19) | (408) | |||||||
Contributions from predecessor member | 1,577 | 1,577 | [1] | 1,577 | 1,577 | |||||||||
Ending balance at Dec. 31, 2013 | 4,798 | $ 0 | 4,798 | |||||||||||
Ending balance at Dec. 31, 2013 | 4,798 | 77 | $ 0 | 4,721 | [1] | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net income (loss) | 410 | 410 | [1] | 410 | 410 | |||||||||
Other comprehensive income (loss) | (100) | (100) | 0 | [1] | (100) | (100) | ||||||||
Distributions to predecessor member | (1,940) | (1,940) | [1] | (1,940) | (1,940) | |||||||||
Contributions from predecessor member | 739 | 739 | [1] | 739 | 739 | |||||||||
Ending balance at Dec. 31, 2014 | 3,907 | 3,907 | ||||||||||||
Ending balance at Dec. 31, 2014 | 3,907 | $ 0 | $ 0 | (23) | 3,930 | [1] | ||||||||
Ending balance, shares at Dec. 31, 2014 | [2] | 0 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net income (loss) | (341) | (341) | ||||||||||||
Other comprehensive income (loss) | (3) | (3) | (3) | |||||||||||
Distributions to predecessor member | (410) | (410) | [1] | (412) | [3] | |||||||||
Contributions from predecessor member | 248 | 248 | [1] | 1,152 | [3] | |||||||||
Common stock issued for acquisition of RJS Power | 902 | 902 | ||||||||||||
Common stock issued for acquisition of RJS Power, shares | [2] | 44,975 | ||||||||||||
Stock issuance (shares) | [2] | 10 | ||||||||||||
Stock issuance expense | (2) | (2) | ||||||||||||
Stock-based compensation | 2 | 2 | ||||||||||||
Consummation of spinoff transaction | [1] | 0 | 3,800 | (3,800) | ||||||||||
Consummation of spinoff transaction, shares | [1],[2] | 83,524 | ||||||||||||
Ending balance at Dec. 31, 2015 | $ 4,303 | $ 4,303 | ||||||||||||
Ending balance at Dec. 31, 2015 | $ 4,303 | $ 4,702 | $ (373) | $ (26) | $ 0 | [1] | ||||||||
Ending balance, shares at Dec. 31, 2015 | 128,509 | 128,509 | [2] | |||||||||||
[1] | Upon consummation of the spinoff on June 1, 2015, Talen Energy Supply's predecessor member's equity balance was transferred to Talen Energy Corporation's "Additional paid-in capital." See Note 1 for additional information on the spinoff. | |||||||||||||
[2] | Shares in thousands. Each share entitles the holder to one vote on any questions presented at any stockholders' meeting. | |||||||||||||
[3] | Includes the contribution of RJS Power as of the acquisition date. See Notes 1 and 6 for additional information. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies General Capitalized terms and abbreviations appearing in the combined notes to the financial statements are defined in the glossary. Dollars are in millions, except per share data, unless otherwise noted. As Talen Energy Corporation is substantially comprised of Talen Energy Supply, LLC and its subsidiaries, to avoid repetition, most disclosures refer to Talen Energy which indicates the disclosure applies to Talen Energy Corporation and Talen Energy Supply, LLC. This presentation has been applied where identification of particular subsidiaries is not material to the matter being disclosed, and to conform narrative disclosures to the presentation of financial information on a consolidated basis. When identification of a particular registrant or subsidiary is considered important to understanding the matter being disclosed, the specific entity's name is used, in particular, for those few disclosures that apply only to Talen Energy Corporation. Each disclosure referring to a subsidiary applies to both Talen Energy Corporation and Talen Energy Supply and each disclosure referring to Talen Energy Supply applies to Talen Energy Corporation through consolidation. Business and Basis of Presentation Business - Spinoff from PPL and formation of Talen Energy Corporation Talen Energy Corporation, through its principal subsidiary Talen Energy Supply, is a competitive energy and power generation company primarily engaged in the production and sale of electricity, capacity and related products. Talen Energy is headquartered in Allentown, Pennsylvania and owns and operates a portfolio of generation assets principally located in the Northeast, Mid-Atlantic and Southwest regions of the U.S. In June 2014, PPL and Talen Energy Supply executed definitive agreements with the Riverstone Holders to combine their competitive power generation businesses into a new, stand-alone, publicly traded company named Talen Energy Corporation. On June 1, 2015, PPL completed the spinoff to PPL shareowners of a newly formed entity, Talen Energy Holdings, Inc. (Holdco), which at such time owned all of the membership interests of Talen Energy Supply and all of the common stock of Talen Energy Corporation. Immediately following the spinoff, Holdco merged with a special purpose subsidiary of Talen Energy Corporation, with Holdco continuing as the surviving company to the merger and as a wholly owned subsidiary of Talen Energy Corporation and the sole owner of Talen Energy Supply. PPL does not have an ownership interest in Talen Energy Corporation after completion of the spinoff. Substantially contemporaneous with the spinoff and merger, RJS Power was contributed by the Riverstone Holders to become a subsidiary of Talen Energy Supply (referred to as the "combination" or the "acquisition"). Subsequent to the acquisition, RJS Power was merged into Talen Energy Supply. Talen Energy has treated the combination with RJS Power as an acquisition, with Talen Energy Supply considered the accounting acquirer in accordance with business combination accounting guidance. See Note 3 for information on Talen Energy Corporation's common shares issued as a result of the formation of Talen Energy Corporation. See Note 6 for additional information on the acquisition. Following the announcement of the transaction to form Talen Energy, efforts were initiated to identify the appropriate staffing for Talen Energy following completion of the spinoff. Organizational plans were substantially completed in 2014. The organizational plans identified the need to resize and restructure the Talen Energy organization and as a result, in 2014, charges of $16 million for employee separation benefits were recorded in "Operation and maintenance" on the Statement of Income and in "Other current liabilities" on the Balance Sheet, related to 112 eliminated positions. The separation benefits include cash severance compensation, lump sum COBRA reimbursement payments and outplacement services. At December 31, 2014 , the recorded liability related to separation benefits was $9 million and included in "Other current liabilities" on the Balance Sheets. Most separations and payment of separation benefits have now been completed and the recorded liability at December 31, 2015 was insignificant. In connection with the spinoff transaction, additional employee-related costs were incurred primarily related to accelerated stock-based compensation and pro-rated performance-based cash incentive and stock-based compensation awards previously issued under PPL stock incentive programs, primarily for Talen Energy Supply employees and for PPL employees who became Talen Energy Supply employees in connection with the transaction. These costs were recognized at the closing of the spinoff. During 2015, Talen Energy Supply recorded $25 million related to these accelerated stock-based compensation and pro-rated stock-based compensation awards at spinoff. As the vesting for all Talen Energy Supply employees was accelerated and all remaining unrecognized compensation expense accelerated concurrently with the spinoff, Talen Energy does not expect to recognize future compensation costs for equity awards from PPL stock incentive programs held by Talen Energy Supply employees. See Note 8 for additional information on stock-based compensation. In addition, during 2015 , Talen Energy incurred $12 million of restructuring costs related to the spinoff transaction which are recorded in "Operation and maintenance" on the Statements of Income. Prior to completion of the spinoff, Talen Energy Supply's financial statements included certain transactions with affiliates of PPL, which were disclosed as related party transactions. After June 1, 2015, all transactions with PPL or its affiliates are no longer related party transactions. See Note 12 for additional information on related party transactions. Following the spinoff, certain services, including information technology, financial and accounting, human resource and other specified services are provided by PPL on a transition basis pursuant to the TSA. The TSA with PPL is for a period of up to two years from the date of the spinoff. For 2015, the costs incurred for these services were $23 million . See Note 12 for information on the TSA with Topaz Power Management, LP. In connection with the FERC approval of the combination of Talen Energy Supply with RJS Power, PPL, Talen Energy and RJS Power agreed that within twelve months following the closing of the transaction, Talen Energy would enter into an agreement to divest between 1,300 MW and 1,400 MW of assets in one of two groups of assets (both of which include the Sapphire facilities within PJM and the first of which also included the Holtwood, Lake Wallenpaupack and C.P. Crane facilities and the other of which includes the Ironwood facility) and to limit PJM energy market offers from assets it would retain in the other group to cost-based offers. In September 2015, Talen Energy requested that the FERC approve a third option for complying with the mitigation requirement that consists of divesting the Holtwood, Lake Wallenpaupack, C.P. Crane and Ironwood facilities, and will have the ability to retain the Sapphire facilities located in PJM, provided PJM energy market offers from such retained assets are limited to cost-based offers. In October 2015, Talen Energy entered into agreements to sell the Holtwood, Lake Wallenpaupack, Ironwood and C.P. Crane facilities. In November 2015, the FERC accepted the alternative plan on the terms requested. See Note 6 for information on the sales. Basis of Presentation Talen Energy Corporation's obligation to report under the Securities and Exchange Act of 1934, as amended, commenced on May 1, 2015, the date Talen Energy Corporation's Registration Statement on Form S-1 relating to the spinoff transaction was declared effective by the SEC. Talen Energy Supply is a separate registrant and is considered the accounting predecessor of Talen Energy Corporation. Therefore, the financial information prior to June 1, 2015 presented in this Annual Report on Form 10-K for both registrants includes only legacy Talen Energy Supply information. From June 1, 2015, upon completion of the spinoff and acquisition, Talen Energy Corporation's and Talen Energy Supply's consolidated financial information also includes RJS. As such, Talen Energy Corporation's and Talen Energy Supply's consolidated financial information presented in this Annual Report on Form 10-K for the 2015 period represents twelve months of legacy Talen Energy Supply information consolidated with seven months of RJS information, while the 2014 and earlier periods represent only legacy Talen Energy Supply information. The assets and liabilities related to the Holtwood, Lake Wallenpaupack, C.P. Crane and Ironwood facilities have been classified as "Assets held for sale" and "Liabilities held for sale" at December 31, 2015 but their operating results have not been reclassified to "Income (Loss) from Discontinued Operations (net of income taxes)" on the Statements of Income in accordance with the new accounting guidance on reporting discontinued operations. See Note 6 for additional information on these announced divestitures and "New Accounting Guidance Adopted - Reporting of Discontinued Operations" below for additional information on this new accounting guidance. "Income (Loss) from Discontinued Operations (net of income taxes)" on the 2014 and 2013 Statements of Income represents the operating results of Talen Montana's hydroelectric generating facilities sold in the fourth quarter of 2014. The Statements of Cash Flows do not separately report the cash flows of discontinued operations. See Note 6 for additional information. As described above, as part of the FERC approval of the combination with RJS Power as part of the spinoff transaction, certain assets were required to be disposed of under a mitigation plan. Under GAAP, assets acquired through a business combination that are immediately classified as held for sale should be classified as a discontinued operation from the date of acquisition. The Sapphire portfolio was included in both of the original divestiture packages approved by the FERC when approving the combination with RJS Power. Therefore, the Sapphire portfolio met the criteria for classification as assets and liabilities held for sale on the balance sheet and as discontinued operations on the statement of income upon acquisition. In November 2015, when the FERC approved the third mitigation package excluding the Sapphire portfolio as discussed above, the assets and liabilities and operating results were reclassified to held and used and to continuing operations as the sale of the Sapphire portfolio was no longer probable and therefore, no longer met the held for sale criteria. When this reclassification occurred, an impairment charge was recorded based on the then current estimated fair values of the facilities. See Notes 14 and 16 for additional information on the impairment charges for the Sapphire plants. The financial statements of Talen Energy include each company's own accounts as well as the accounts of all entities in which the company has a controlling financial interest. Entities for which a controlling financial interest is not demonstrated through voting interests are evaluated based on accounting guidance for VIEs. Talen Energy consolidates a VIE when they are determined to have a controlling interest in the VIE, and thus are the primary beneficiary of the entity. Talen Energy is not the primary beneficiary in any material VIEs. Investments in entities in which a company has the ability to exercise significant influence but does not have a controlling financial interest are accounted for under the equity method. All other investments are carried at cost or fair value. All significant intercompany transactions have been eliminated. Any noncontrolling interests are reflected in the financial statements. The financial statements of Talen Energy include their share of any undivided interests in jointly owned facilities, as well as their share of the related operating costs of those facilities. See Note 10 for additional information. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Loss Accruals Potential losses are accrued when (1) information is available that indicates it is "probable" that a loss has been incurred, given the likelihood of the uncertain future events and (2) the amount of the loss can be reasonably estimated. Accounting guidance defines "probable" as cases in which "the future event or events are likely to occur." Talen Energy continuously assesses potential loss contingencies for environmental remediation, litigation claims, regulatory penalties and other events. Loss accruals for environmental remediation are discounted when appropriate. Reclassifications Certain amounts in the prior period financial statements have been reclassified to conform to current period's presentation, including the change in presentation discussed below. The reclassifications did not affect operating income, net income or equity. In these financial statements, revenue and expense from derivatives is recorded based on Talen Energy's economic hedging strategy. For example, all purchases and sales associated with economic hedging of the sale of energy using contracts accounted for as derivatives are recorded within "Operating Revenues" and all purchases and sales associated with economic hedging of the procurement of fuel or purchasing energy using contracts accounted for as derivatives are recorded as "Operating Expenses" on the Statements of Income. Prior to 2015, Talen Energy classified all non-trading commodity hedge transactions as revenue or expense based upon whether each specific transaction was a sale or purchase, which in certain instances, created losses within revenue and gains within expense. As a result of this change in presentation, there was an equal and offsetting increase of $845 million in 2014 and a decrease of $19 million in 2013 primarily in "Wholesale energy" and "Energy purchases" on the Statements of Income. Earnings Per Share for Talen Energy Corporation See Note 3 for information on the calculation of EPS. Price Risk Management Energy and energy-related contracts are used to hedge the variability of expected cash flows associated with the competitive generating units and marketing activities, as well as for trading purposes. Interest rate contracts may be utilized to hedge exposures to changes in the fair value of debt instruments and to hedge exposures to variability in expected cash flows associated with existing floating-rate debt instruments or forecasted fixed-rate issuances of debt. Similar derivatives may receive different accounting treatment, depending on management's intended use and documentation. Certain energy and energy-related contracts meet the definition of a derivative, while others do not meet the definition of a derivative because they lack a notional amount or a net settlement provision. In cases where there is no net settlement provision, markets are periodically assessed to determine whether market mechanisms have evolved that would facilitate net settlement. Certain derivative energy contracts have been excluded from the requirements of derivative accounting treatment because NPNS has been elected. These contracts are accounted for using accrual accounting. All other contracts that have been classified as derivative contracts are reflected on the balance sheets at fair value. These contracts are recorded as "Price risk management assets" and "Price risk management liabilities" on the Balance Sheets. The portion of derivative positions that settle within a year are included in "Current Assets" and "Current Liabilities," while the portion of derivative positions that settle beyond a year are recorded in "Other Noncurrent Assets" and "Deferred Credits and Other Noncurrent Liabilities." Talen Energy considers intra-month transactions to be spot activity, which is not accounted for as a derivative. Energy and energy-related contracts are assigned a strategy and accounting classification. Processes exist that allow for subsequent review and validation of the contract information. See Note 15 for more information. The accounting department provides the traders and the risk management department with guidelines on appropriate accounting classifications for various contract types and strategies. Some examples of these guidelines include, but are not limited to: • Physical coal, limestone, lime, uranium, electric transmission, gas transportation, gas storage and renewable energy credit contracts not traded on an exchange are not derivatives due to the lack of net settlement provisions. • Only contracts where physical delivery is deemed probable throughout the entire term of the contract can qualify for NPNS. • Derivative transactions that do not qualify for NPNS, or for which NPNS treatment is not elected, are recorded at fair value through earnings. A similar process is also followed by the treasury department as it relates to interest rate derivatives. Examples of accounting guidelines provided to the treasury department staff include, but are not limited to: • Transactions to lock in an interest rate prior to a debt issuance can be designated as cash flow hedges, to the extent the forecasted debt issuances remain probable of occurring. • Transactions entered into to hedge fluctuations in the fair value of existing debt can be designated as fair value hedges. Cash inflows and outflows related to derivative instruments are included as a component of operating, investing or financing activities on the Statements of Cash Flows, depending on the classification of the hedged items. Talen Energy has elected not to offset net derivative positions against the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) under master netting arrangements. Talen Energy reflects its net realized and unrealized gains and losses associated with all derivatives that are held for trading purposes in "Wholesale energy" on the Statements of Income. See Notes 14 and 15 for additional information on derivatives. Revenue Recognition Operating revenues from the sale of energy, capacity and ancillary services are recognized when the product or service is delivered to a customer or contractually earned, unless they meet the definition of and are accounted for as derivatives. See "Accounting and Reporting" in Note 15 for additional information on the accounting for derivatives. Operating revenues are recorded based on energy deliveries through the end of the calendar month. Unbilled retail revenues result because customers' meters are read and bills are rendered throughout the month, rather than all being read at the end of the month. Unbilled revenues for a month are calculated by multiplying an estimate of unbilled kWh by the estimated average cents per kWh. Unbilled wholesale energy revenues are recorded at month-end to reflect estimated amounts until actual dollars and MWhs are confirmed and invoiced. Immaterial differences between estimated and actual revenues are adjusted the following month. "Energy-related businesses" revenue primarily includes revenue from Talen Energy's mechanical contracting and engineering subsidiaries. These subsidiaries record revenue from construction contracts on the percentage-of-completion method of accounting, measured by the actual cost incurred to date as a percentage of the estimated total cost for each contract. Accordingly, costs and estimated earnings in excess of billings on uncompleted contracts are recorded within "Unbilled revenues" on the Balance Sheets, and billings in excess of costs and estimated earnings on uncompleted contracts are recorded within "Other current liabilities" on the Balance Sheets. The amount of costs and estimated earnings in excess of billings was $18 million and $20 million at December 31, 2015 and 2014 , and the amount of billings in excess of costs and estimated earnings was $44 million and $41 million at December 31, 2015 and 2014 . During 2015 , Talen Energy recorded a $7 million decrease to "Retail energy" revenues on the Statements of Income. Prior to the spinoff, Talen Energy billed and collected amounts from a third party that had a transmission operating agreement with Talen Energy's former affiliate, PPL Electric. Such amounts should have been recognized as an affiliate payable, but were inadvertently recorded as revenue. The $4 million after-tax impact ( $0.04 per share for Talen Energy Corporation) of correcting this overstatement of "Retail energy" revenues decreased "Income (Loss) from Continuing Operations after Income Taxes" and "Net Income (Loss)" on the 2015 Statement on Income. The impact of the overstatement was not material to the previously-issued financial statements and the correction was not material to the full year results for 2015 . During 2014 , Talen Energy recorded a $17 million increase to "Energy-related businesses" revenues and "Income (Loss) from Continuing Operations before Income Taxes" on the 2014 Statement of Income related to the timing of revenue recognition for a mechanical contracting and engineering subsidiary in prior periods. The $10 million after-tax impact ( $0.13 per share for Talen Energy Corporation) of correcting this error increased "Income (Loss) from Continuing Operations after Income Taxes" and "Net Income (Loss)" in 2014 . The impact of the error was not material to the previously-issued financial statements and the correction was not material to the full year results for 2014 . Accounts Receivable Accounts receivable are reported on the Balance Sheets at the gross outstanding amount adjusted for an allowance for doubtful accounts. Accounts receivable that are acquired are initially recorded at fair value on the date of acquisition. Accounts receivable collectability is evaluated using a combination of factors, including past due status based on contractual terms, trends in write-offs, the age of the receivable, counterparty creditworthiness and economic conditions. Specific events, such as bankruptcies, are also considered. Adjustments to the allowance for doubtful accounts are made when necessary based on the results of analysis, the aging of receivables and historical and industry trends. Accounts receivable are written off in the period in which the receivable is deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when it is known they will be received. The changes in the allowance for doubtful accounts were: Additions Balance at Beginning of Period Charged to Income Charged to Other Accounts Deductions (a) Balance at End of Period 2015 $ 2 $ — $ — $ 1 $ 1 2014 21 — — 19 (b) 2 2013 23 1 — 3 21 (a) Primarily related to uncollectible accounts written off. (b) In 2011, a wholesale customer filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy code. In 2014, Talen Energy Marketing received an insignificant amount of cash, settling the outstanding administrative claim and therefore, the related reserve balance was offset against the accounts receivable balance. Cash Cash Equivalents All highly liquid investments with original maturities of three months or less are considered to be cash equivalents. Restricted Cash and Cash Equivalents Bank deposits and other cash equivalents that are restricted by agreement or that have been clearly designated for a specific purpose are classified as restricted cash and cash equivalents. The change in restricted cash and cash equivalents is reported as an investing activity on the Statements of Cash Flows. On the Balance Sheets, the current portion of restricted cash and cash equivalents is shown as "Restricted cash and cash equivalents" while the noncurrent portion is included in "Other noncurrent assets." At December 31, the balances of restricted cash and cash equivalents included the following. 2015 2014 Margin deposits posted to counterparties $ 91 $ 175 Ironwood debt service reserves 15 17 Other — 1 $ 106 $ 193 Fair Value Measurements Talen Energy values certain financial and nonfinancial assets and liabilities at fair value. Generally, the most significant fair value measurements relate to price risk management assets and liabilities, investments in securities including investments in the NDT funds and defined benefit plans, and cash and cash equivalents. Talen Energy uses, as appropriate, a market approach (generally, data from market transactions), an income approach (generally, present value techniques and option-pricing models) and/or a cost approach (generally, replacement cost) to measure the fair value of an asset or liability. These valuation approaches incorporate inputs such as observable, independent market data and/or unobservable data that management believes are predicated on the assumptions market participants would use to price an asset or liability. These inputs may incorporate, as applicable, certain risks such as nonperformance risk, which includes credit risk. Talen Energy classifies fair value measurements within one of three levels in the fair value hierarchy. The level assigned to a fair value measurement is based on the lowest level input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are as follows: Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date. Active markets are those in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 - inputs other than quoted prices included within Level 1 that are either directly or indirectly observable for substantially the full term of the asset or liability. Level 3 - unobservable inputs that management believes are predicated on the assumptions market participants would use to measure the asset or liability at fair value. Assessing the significance of a particular input requires judgment that considers factors specific to the asset or liability. As such, Talen Energy's assessment of the significance of a particular input may affect how the assets and liabilities are classified within the fair value hierarchy. Investments Generally, the original maturity date of an investment and management's intent and ability to sell an investment prior to its original maturity determine the classification of investments as either short-term or long-term. Investments that would otherwise be classified as short-term, but are restricted as to withdrawal or use for other than current operations or are clearly designated for expenditure in the acquisition or construction of noncurrent assets or for the liquidation of long-term debts, are classified as long-term. Short-term Investments Short-term investments generally include certain deposits as well as securities that are considered highly liquid or provide for periodic reset of interest rates. Investments with original maturities greater than three months and equal to or less than a year, as well as investments with original maturities of greater than a year that management has the ability and intent to sell within a year, are included in "Other current assets" on the Balance Sheets. Investments in Debt and Equity Securities Investments in debt securities are classified as held-to-maturity and measured at amortized cost when there is an intent and ability to hold the securities to maturity. Debt and equity securities held principally to capitalize on fluctuations in their value with the intention of selling them in the near-term are classified as trading. All other investments in debt and equity securities are classified as available-for-sale. Both trading and available-for-sale securities are carried at fair value. The specific identification method is used to calculate realized gains and losses on debt and equity securities. Any unrealized gains and losses on trading securities are included in earnings. The criteria for determining whether a decline in fair value of a debt security is other than temporary and whether the other-than-temporary impairment is recognized in earnings or reported in OCI require that when a debt security is in an unrealized loss position and: • there is an intent or a requirement to sell the security before recovery, the other-than-temporary impairment is recognized currently in earnings; or • there is no intent or requirement to sell the security before recovery, the portion of the other-than-temporary impairment that is considered a credit loss, if any, is recognized currently in earnings and the remainder of the other-than-temporary impairment is reported in OCI, net of tax. Unrealized gains and losses on available-for-sale equity securities are reported, net of tax, in OCI. When an equity security's decline in fair value below cost is determined to be an other-than-temporary impairment, the unrealized loss is recognized currently in earnings. See Notes 14 and 19 for additional information on investments in debt and equity securities. Long-Lived and Intangible Assets Property, Plant and Equipment PP&E is recorded at original cost, unless impaired. PP&E acquired in business combinations is recorded at fair value at the time of acquisition, which establishes its original cost. If impaired, the asset is written down to fair value at that time, which becomes the new cost basis of the asset. Original cost for constructed assets includes material, labor, contractor costs, certain overheads and financing costs, where applicable. The cost of repairs and minor replacements are charged to expense as incurred. Costs associated with planned major maintenance projects are recorded in the period in which the costs are incurred. No costs associated with planned major maintenance projects are accrued in advance of the period in which the work is performed. Nuclear fuel-related costs, including fuel, conversion, enrichment, fabrication and assemblies, are capitalized as PP&E. Such costs are amortized as the fuel is spent using the units-of-production method and included in "Fuel" on the Statements of Income. Talen Energy capitalizes interest costs as part of construction costs. Capitalized interest was as follows for the years ended December 31 . 2015 2014 2013 $ 20 $ 23 $ 37 Depreciation Depreciation is recorded over the estimated useful lives of property using primarily the straight-line, composite and group methods. When a component of PP&E that was depreciated under the composite or group method is retired, the original cost is charged to accumulated depreciation. When all or a significant portion of an operating unit that was depreciated under the composite or group method is retired or sold, the property and the related accumulated depreciation account is reduced and any gain or loss is included in income. The weighted-average rates of depreciation were 3.18% and 3.28% at December 31, 2015 and 2014 . Goodwill and Other Intangible Assets Goodwill represents the excess of the purchase price paid over the fair value of the identifiable net assets acquired in a business combination. Other acquired intangible assets are initially measured based on their fair value. Intangibles that have finite useful lives are amortized over their useful lives based upon the pattern in which the economic benefits of the intangible assets are consumed or otherwise used. Costs incurred to obtain an initial license and renew or extend terms of licenses are capitalized as intangible assets. When determining the useful life of an intangible asset, including intangible assets that are renewed or extended, Talen Energy and its subsidiaries consider the expected use of the asset; the expected useful life of other assets to which the useful life of the intangible asset may relate; legal, regulatory, or contractual provisions that may limit the useful life; the company's historical experience as evidence of its ability to support renewal or extension; the effects of obsolescence, demand, competition, and other economic factors; and the level of maintenance exp |
Segment and Related Information
Segment and Related Information | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment and Related Information | Segment and Related Information Prior to the spinoff transaction, Talen Energy operated within a single reportable segment. Immediately following the spinoff, Talen Energy determined that it operated in two reportable segments: East and West, primarily based on geographic location and energy market characteristics. After the completion of the MACH Gen acquisition in November 2015, management reevaluated its segment composition. At December 31, 2015 , Talen Energy continues to operate in two reportable segments, however with a different composition than prior to the November 2015 MACH Gen acquisition, primarily based on geographic location. The East segment now primarily includes the generating, marketing and trading activities in PJM, NYISO and ISO-NE. The West segment includes the generating, marketing and trading activities in ERCOT and WECC, including the coal-fired facility, Colstrip, in Montana, which was included in the East segment prior to the segment reevaluation. Segment information for prior periods has been revised to reflect the current period presentation as the composition of the segments and the measurement of segment performance has changed. Previously, net income was used as the measure of segment performance. Beginning in June 2015, operating income, as well as the non-GAAP measures, Adjusted EBITDA and Margins, is used as a measure of segment performance. "Other" primarily includes wages, benefits, services, certain insurance, rent, financing costs incurred primarily at Talen Energy, which have not been allocated or assigned to the segments and inter-company eliminations, and is presented to reconcile segment information to consolidated results. Financial data for the segments and reconciliation to consolidated results for the years ended December 31 are: East West Other Total 2015 Revenues from external customers by product Energy $ 3,653 $ 284 $ — $ 3,937 Energy-related business 544 — — 544 Total Revenues $ 4,197 $ 284 $ — $ 4,481 Operating income (loss) (a) $ 198 $ 2 $ (239 ) $ (39 ) Depreciation 327 26 3 356 Amortization (b) 200 1 21 222 Unrealized (gains) losses on derivatives and other hedging activities (c) (143 ) 24 — (119 ) Impairments (d) 657 — — 657 Expenditures for long-lived assets (e) 387 39 38 464 Total assets (f) 11,430 1,231 165 12,826 2014 Revenues from external customers by product Energy $ 3,771 $ 209 $ — $ 3,980 Energy-related business 601 — — 601 Total Revenues $ 4,372 $ 209 $ — $ 4,581 Operating income (loss) $ 558 $ 71 $ (232 ) $ 397 Depreciation 296 1 — 297 Amortization (b) 154 — 9 163 Unrealized (gains) losses on derivatives and other hedging activities (c) 35 (31 ) — 4 Expenditures for long-lived assets 400 31 — 431 Total assets (f) 10,308 160 292 10,760 2013 Revenues from external customers by product Energy $ 3,791 $ 177 $ — $ 3,968 Energy-related business 527 — — 527 Total Revenues $ 4,318 $ 177 $ — $ 4,495 Operating income (loss) (a) $ 652 $ (750 ) $ (195 ) $ (293 ) Depreciation 288 11 — 299 Amortization (b) 149 — 7 156 Unrealized (gains) losses on derivatives and other hedging activities (c) 163 8 — 171 Impairments (d) — 65 — 65 Expenditures for long-lived assets 537 31 — 568 (a) In 2015, the East segment includes impairment charges of $657 million related to goodwill and other asset impairments. See Notes 14 and 16 for additional information. In 2013, the West segment includes a charge of $697 million for the termination of the lease of the Colstrip plant and a $65 million impairment charge related to the Corette plant. See Notes 6 and 14 for additional information. (b) Represents non-cash items that include the amortization of nuclear fuel, debt discounts and premiums, debt issuance costs, emission allowances and RECs. (c) See Note 15 for additional information. (d) See Notes 14 and 16 for additional information. (e) Does not include expenditures for business acquisitions. (f) Other primarily consists of unallocated items, including cash and PP&E. |
Earnings (Loss) Per Share for T
Earnings (Loss) Per Share for Talen Energy Corporation | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share for Talen Energy Corporation | Earnings (Loss) Per Share for Talen Energy Corporation On June 1, 2015, the spinoff date, Talen Energy Corporation issued 128,499,023 shares of common stock, including 83,524,365 shares issued to PPL's shareholder's and 44,974,658 shares issued in a private placement to the Riverstone Holders. To calculate basic and diluted EPS for periods presented prior to June 1, 2015, Talen Energy Corporation used the shares issued to PPL's shareholders on the date of the spinoff as Talen Energy Corporation was a wholly owned subsidiary of PPL and no shares were outstanding prior to that date. The calculation of basic and diluted earnings per share for 2015 utilized the weighted-average shares outstanding during the year assuming the shares issued to PPL's shareholders were outstanding during the entire year and reflects the impact of the private placement of shares to the Riverstone Holders on the spinoff date. For 2014 and 2013, weighted average shares outstanding assumed the shares issued to PPL's shareholders at the spinoff date in 2015 were outstanding during those entire years. Basic EPS is computed by dividing income by the weighted-average number of common shares outstanding during the applicable period. Diluted EPS is computed by dividing income by the weighted-average number of common shares outstanding, increased by incremental shares that would be outstanding if potentially dilutive non-participating securities were converted to common shares as calculated using the Treasury Stock Method. Reconciliations of the amounts of income and shares of Talen Energy Corporation common stock (in thousands) for the years ended December 31 used in the EPS calculation are: 2015 2014 2013 Income (Numerator) Attributable to Talen Energy Corporation Stockholders Income (Loss) from continuing operations after income taxes $ (341 ) $ 187 $ (262 ) Income (Loss) from discontinued operations (net of income taxes) — 223 32 Net Income (Loss) $ (341 ) $ 410 $ (230 ) Shares of Common Stock (Denominator) Weighted-average shares - Basic EPS 109,898 83,524 83,524 Weighted-average shares - Diluted EPS 109,898 83,524 83,524 Share-based payment awards of 731 thousand were excluded from weighted-average shares in the computation of diluted EPS for 2015 because the effect would have been antidilutive. |
Income and Other Taxes
Income and Other Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income and Other Taxes | Income and Other Taxes Details of the components of income tax expense, a reconciliation of federal income taxes derived from statutory tax rates applied to "Income (Loss) from Continuing Operations Before Income Taxes" to income taxes for reporting purposes, and details of "Taxes, other than income" were as follows: 2015 2014 2013 Income Tax Expense (Benefit) Current - Federal $ 43 $ 28 $ 118 Current - State — 13 16 Total Current Expense 43 41 134 Deferred - Federal (22 ) 66 (263 ) Deferred - State (37 ) 11 (27 ) Total Deferred Expense (Benefit) (59 ) 77 (290 ) Investment tax credit, net - federal (11 ) (2 ) (3 ) Total income taxes (benefits) from continuing operations (a) $ (27 ) $ 116 $ (159 ) Total income tax expense (benefit) - Federal $ 10 $ 92 $ (148 ) Total income tax expense (benefit) - State (37 ) 24 (11 ) Total income taxes (benefits) from continuing operations (a) $ (27 ) $ 116 $ (159 ) (a) Excludes current and deferred federal and state tax expense recorded to Discontinued Operations of $109 million and $17 million in 2014 and 2013 . Also excludes federal and state tax expense (benefit) recorded to OCI of $(1) million , $(56) million and $47 million in 2015 , 2014 and 2013 . 2015 2014 2013 Reconciliation of Income Tax Expense Federal income tax on Income from Continuing Operations Before Income Taxes at statutory tax rate - 35% $ (129 ) $ 106 $ (147 ) Increase (decrease) due to: State income taxes, net of federal income tax benefit (3 ) 17 (24 ) Federal and state tax reserve adjustments (a) (12 ) — — Federal income tax credits (b) (9 ) — (8 ) State deferred tax rate change, net of federal benefit (c) (17 ) (1 ) 15 Federal and state income tax return adjustments (7 ) — — Goodwill Impairment (d) 144 — — Other 6 (6 ) 5 Total increase (decrease) 102 10 (12 ) Total income taxes $ (27 ) $ 116 $ (159 ) Effective income tax rate 7.4 % 38.3 % 37.9 % (a) In 2015, open audits for the tax years 2008-2011 were settled by PPL with the IRS resulting in a tax benefit of $12 million for Talen Energy's portion of the settlement of previously unrecognized tax benefits. (b) During 2015, Talen Energy recorded a benefit primarily related to the recognition of previously unamortized tax credits as a result of the sale of Talen Renewable Energy in November 2015. During 2013, Talen Energy recorded deferred tax benefits related to investment tax credits on progress expenditures for the Holtwood hydroelectric plant expansion. See Note 6 for additional information. (c) During 2015 , 2014 and 2013 , Talen Energy recorded adjustments related to its December 31 state deferred tax liabilities as a result of annual changes in state apportionment and the impact on the future estimated state income tax rate. (d) A significant portion of the impairment was related to non-deductible goodwill. See Note 16 for additional information on the goodwill impairment. 2015 2014 2013 Taxes, other than income State gross receipts $ 41 $ 45 $ 37 State capital stock 1 1 1 Property and other 23 11 15 Total $ 65 $ 57 $ 53 At December 31 , significant components of Talen Energy's deferred income tax assets and liabilities were as follows 2015 2014 Deferred Tax Assets Deferred investment tax credits $ 6 $ 11 Accrued pension costs 121 98 Federal net operating loss carryforwards 110 22 Federal tax credit carryforwards — 13 State net operating loss carryforwards 19 79 Other 105 79 Valuation allowances (10 ) (78 ) Total deferred tax assets 351 224 Deferred Tax Liabilities Plant - net 1,874 1,374 Unrealized gain on qualifying derivatives 53 28 Other 10 42 Total deferred tax liabilities 1,937 1,444 Net deferred tax liability $ 1,586 $ 1,220 At December 31 , Talen Energy had the following federal and state net operating loss carryforwards. 2015 Expiration Loss carryforwards Federal net operating losses (a) (b) $ 314 2028-2034 State net operating losses (a) (b) 274 2016-2035 (a) The federal and state net operating loss carryforwards presented above are net of unrecognized tax benefits recorded for deferred tax assets. (b) A portion of the net operating loss carryforwards consist of tax losses obtained as a result of the acquisition of MACH Gen. The utilization of these carryforwards are subject to annual limitations imposed by Section 382 of the Internal Revenue Code, which limits a company’s ability to deduct prior net operating losses following a more than 50 percent change in ownership. The Section 382 limitation is not expected to prevent Talen Energy from utilizing its federal loss carryforwards in future years. State net operating loss carryforwards are also dependent upon state taxable income or loss, the state’s proportion of taxable net income and the application of state laws, which can change from year to year and impact the amount of such carryforward utilization. Valuation allowances have been established for the amount that, more likely than not, will not be realized. The changes in deferred tax valuation allowances were as follows: Additions Balance at Beginning of Period Charged to Income Charged to Other Accounts (a) Reductions Balance at End of Period 2015 $ 78 $ — $ (68 ) $ — $ 10 2014 78 — — — 78 2013 74 4 — — 78 (a) 2015 decreased by $78 million for valuation allowances against deferred tax assets retained by PPL upon spinoff and increased by $10 million for valuation allowances established against deferred tax assets acquired in the MACH Gen acquisition in November 2015. Unrecognized Tax Benefits Changes to unrecognized tax benefits were as follows: 2015 2014 Beginning of period $ 15 $ 15 Increases based on tax positions of prior years (a) 31 — Decreases relating to settlements with taxing authorities (b) (15 ) — End of period $ 31 $ 15 (a) Increased unrecognized tax benefits were established to offset the deferred tax asset related to net operating loss carryforwards as a result of the MACH Gen acquisition in November 2015. (b) Decreased as a result of IRS audit settlements for tax years 1998-2011 during the year ended December 31, 2015. A change in unrecognized tax benefits is not expected to occur in the next twelve months. At December 31, 2015 and 2014 the total unrecognized tax benefits and related indirect effects that, if recognized, would impact the effective tax rate were $30 million and $14 million . At December 31, 2014 a receivable balance of $16 million was recorded for interest related to tax positions, which was settled in connection with the 1998-2011 IRS settlement, prior to the spinoff from PPL. The following interest expense (benefit) was recognized in income taxes for the years ended December 31 . 2015 2014 2013 $ — $ (1 ) $ 5 The federal and state income tax provisions for Talen Energy are calculated in accordance with an intercompany tax sharing agreement which provides that taxable income be calculated as if each subsidiary filed a separate return. Talen Energy or its subsidiaries indirectly or directly file tax returns primarily in two tax jurisdictions. With few exceptions, at December 31, 2015 , the tax years in these jurisdictions that remain subject to examination are: U.S. (federal) 2009 - present Pennsylvania (state) 2012 - present |
Financing Activities
Financing Activities | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Financing Activities | Financing Activities Credit Arrangements and Short-term Debt Talen Energy maintains credit arrangements to enhance liquidity and provide credit support. For reporting purposes, on a consolidated basis, the credit arrangements of Talen Energy Supply and its subsidiaries also apply to Talen Energy Corporation. Revolving Credit Facilities The following secured revolving credit facilities were in place at December 31, 2015 : Expiration Date Capacity Borrowed (c) Letters of Unused Capacity Talen Energy Supply RCF (a) June 2020 $ 1,850 $ 500 $ 163 $ 1,187 New MACH Gen RCF (b) July 2021 160 108 31 21 Total Credit Facilities $ 2,010 $ 608 $ 194 $ 1,208 (a) The facility is syndicated and provides capacity available for short-term borrowings and up to $925 million of letters of credit. The facility requires Talen Energy Supply to maintain a senior secured net debt to adjusted EBITDA ratio (as defined in the agreement) of less than or equal to 4.50 to 1.00 as of the last day of any fiscal quarter. Talen Energy Supply pays customary fees on the facility and borrowings bear interest at its option at either a defined base rate or LIBOR-based rates, in each case plus an applicable margin. The weighted average interest rate on outstanding borrowings at December 31, 2015 was 2.67% . (b) The facility provides capacity available for short-term borrowings and up to $120 million of letters of credit. New MACH Gen pays customary fees on the facility and borrowings bear interest at 12-month LIBOR, plus an applicable margin. The weighted average interest rate on outstanding borrowings at December 31, 2015 was 5.04% . (c) The amounts borrowed are recorded as "Short-term debt" on the Balance Sheet. The Talen Energy Supply RCF was entered into on June 1, 2015 in connection with the completion of the spinoff transaction and replaced Talen Energy Supply's previously existing unsecured syndicated credit facility. Any outstanding principal amounts under the old facility were repaid prior to the termination of the old facility and outstanding letters of credit were transferred to the Talen Energy Supply RCF. The facility is secured by liens on a majority of Talen Energy Supply's assets and is guaranteed by certain Talen Energy Supply subsidiaries, which guarantees are in turn secured by liens on assets of such subsidiaries with an aggregate carrying value of $7 billion at December 31, 2015 . The facility provides the option to raise incremental credit facilities, refinance the loans with debt incurred outside the facility and extend the maturity date of the revolving credit commitments and loans and, if applicable, term loans, subject to certain limitations. The Talen Energy Supply letter of credit facility and uncommitted credit facilities that existed at December 31, 2014 either expired or matured during the first quarter of 2015. Any previously issued letters of credit under these facilities were either terminated or reissued under the then-outstanding unsecured syndicated credit facility and upon closing of the spinoff were reissued under the Talen Energy Supply RCF described above. During the year ended December 31, 2015 , Talen Energy wrote-off $12 million of unamortized fees to "Interest expense" on the Statements of Income as a result of the termination of the prior unsecured syndicated credit facility. The New MACH Gen RCF is a component of the $642 million First Lien Credit and Guaranty Agreement, which was outstanding when Talen Energy acquired MACH Gen in November 2015. The First Lien Credit and Guaranty Agreement also contains a Term Loan B as described in "Long-term Debt" below. Obligations under the First Lien Credit and Guaranty Agreement are guaranteed by each of New MACH Gen's subsidiaries and are secured by a first priority security interest, subject to possible shared first lien status with certain permitted hedge and power sale agreements, in all of the assets of New MACH Gen and each guarantor, including the equity interests in New MACH Gen and each guarantor, which assets collectively have an aggregate carrying value of approximately $1 billion at December 31, 2015. Talen Energy is not a guarantor or obligor of borrowings under the First Lien Credit and Guaranty Agreement. Other Facilities Talen Energy Supply maintains a $500 million agreement expiring June 2017 that provides Talen Energy Supply the ability to request up to $500 million of committed unsecured letter of credit capacity at fees to be agreed upon at the time of each request, based on certain market conditions. At December 31, 2015 , Talen Energy Supply had not requested any capacity for the issuance of letters of credit under this arrangement. In December 2015, Talen Energy Supply and Talen Energy Marketing entered into the Amended Secured Energy Marketing and Trading Facility Agreement (Amended STF Agreement) to amend the $800 million Secured Energy Marketing and Trading Facility Common Agreement, dated as of November 1, 2010. The Amended STF Agreement increased the facility capacity to $1.3 billion . The facility allows Talen Energy Supply to receive credit to satisfy collateral posting obligations related to Talen Energy's energy marketing and trading activities with counterparties participating in the facility. Prior to the Talen Energy spinoff transactions, Montour, LLC and Brunner Island, LLC had guaranteed certain of Talen Energy Marketing's obligations and had granted mortgage liens on their respective generating facilities to secure such guarantees. Brunner Island and Montour have since been released as parties. Obligations under the Amended STF Agreement are secured by the same collateral that secures the Talen Energy Supply RCF described above. The facility is for a five -year term that is subject to an automatic one -year extension each year until termination under the provisions of the Amended STF Agreement. The initial term expires in December 2020 . There were $54 million of secured obligations outstanding under this facility at December 31, 2015 . Long-term Debt The following long-term debt was outstanding at December 31: 2015 2014 Weighted-Average Rate Maturities Senior Unsecured Notes 5.41 % 2016-2038 $ 3,713 $ 2,193 Senior Secured Notes 8.86 % 2025 41 45 Term Loan B 6.21 % 2022 474 — Total Long-term Debt Before Adjustments 4,228 2,238 Fair market value adjustments (23 ) (19 ) Unamortized premium and (discount), net (2 ) (1 ) Total Long-term Debt 4,203 2,218 Less current portion of Long-term Debt, including fair market value adjustment 399 535 Total Long-term Debt, noncurrent $ 3,804 $ 1,683 The aggregate maturities of long-term debt are as follows: 2016 2017 2018 2019 2020 Thereafter Total $ 396 $ 5 $ 424 $ 1,244 $ 179 $ 1,980 $ 4,228 Long-term Debt Activity In May 2015, Talen Energy Supply issued $600 million of 6.50% Senior Unsecured Notes due 2025 . Talen Energy Supply received proceeds of $591 million , net of underwriting fees, which were used for repayment of short-term debt. The notes may be redeemed at Talen Energy Supply's option, in whole at any time or in part from time to time, prior to June 1, 2020 at a price equal to 100% of their principal amount plus a make-whole premium and on or after June 1, 2020 at specified redemption prices. In addition, on or prior to June 1, 2018, up to 35% of the notes may be redeemed by Talen Energy Supply with proceeds from certain equity offerings at a price equal to 106.5% of the principal amount. In June 2015, Talen Energy Supply assumed $1.25 billion of RJS Power Holdings LLC's 5.125% Senior Notes due 2019 as a result of the merger of RJS Power Holdings LLC into Talen Energy Supply, by which Talen Energy Supply became the obligor of these notes. In connection with this event and pursuant to the terms of the indenture governing the notes, the coupon on the notes was reduced to 4.625% in July 2015. In September 2015, Talen Energy Supply completed a remarketing of $231 million of Exempt Facilities Revenue Refunding Bonds, Series 2009A due 2038, Series 2009B due 2038, and Series 2009C due 2037 that were issued by PEDFA on behalf of Talen Energy Supply in 2009. All series bore interest at a fixed rate of 3.0% prior to the remarketing. The Series 2009A Bonds, with a principal amount of $100 million , were remarketed at a fixed coupon of 6.40% to maturity. The Series 2009B Bonds and Series 2009C Bonds, with an aggregate principal amount of $131 million , were remarketed at a fixed rate of 5.00% for five years, at which time they will be subject to mandatory repurchase and optional remarketing. This transaction is excluded from the Statement of Cash Flows as a non-cash transaction. In October 2015, Talen Energy Supply's $300 million of 5.70% REset Put Securities due 2035 (REPS) were subject to mandatory tender to the remarketing dealer. However, the remarketing dealer and Talen Energy Supply mutually agreed to terminate the remarketing dealer's right to remarket the REPS and, in accordance with the terms of the REPS, Talen Energy Supply repurchased the REPS at par. The total aggregate consideration paid to repurchase the REPS was $434 million , which included $300 million of principal and $134 million of remarketing option value paid to the remarketing dealer. The termination payment to the remarketing dealer was recorded to "Other Income (Expense) - net" on the 2015 Statement of Income and is reflected in "Cash from operating activities" on the 2015 Statement of Cash Flows. Following the MACH Gen acquisition in November 2015, $475 million of New MACH Gen Term Loan B debt secured under the First Lien Credit and Guaranty Agreement, which is described above, remained outstanding. The Term Loan B provides customary annual amortization paid quarterly and may also be repaid, in whole or in part, beginning in the third quarter of 2016 without any make-whole premium. See "Credit Arrangements and Short-term Debt - Revolving Credit Facilities" above for information regarding guarantees of and security interests with respect to the First Lien Credit and Guaranty Agreement. In December 2015, Talen Energy Supply announced an "exchange offer" for its 6.5% Senior Unsecured Notes due 2025 that were issued in May 2015. Pursuant to the terms of the notes, Talen Energy Supply offered to exchange all of the outstanding notes for a like principal amount of its 6.5% Senior Notes due 2025 that, have been registered under the Securities Exchange Act of 1933, as amended. In January 2016, the exchange offer was completed with all of the notes exchanged. In connection with the sale of Talen Ironwood Holdings, LLC, in January 2016, a Talen Ironwood Holdings, LLC subsidiary completed the redemption of $41 million of its 8.857% Senior Secured Notes due 2025 prior to the closing of the sale transaction, which occurred in February 2016. The redemption included the payment of a make whole premium of $14 million , which will be recorded as a component of the expected gain on sale in "Operating Income" on the Statement of Income in 2016. See Note 6 for additional information on the sale of Talen Ironwood Holdings, LLC. Preferred Stock of Talen Energy Corporation Talen Energy Corporation is authorized under its Amended and Restated Certificate of Incorporation to issue up to 100 million shares of preferred stock. No shares of preferred stock were issued or outstanding at December 31, 2015 . Legal Separateness The subsidiaries of Talen Energy Corporation are separate legal entities. Talen Energy Corporation's subsidiaries are not liable for the debts of Talen Energy Corporation. Accordingly, creditors of Talen Energy Corporation may not satisfy their debts from the assets of Talen Energy Corporation's subsidiaries absent a specific contractual undertaking by a subsidiary to pay Talen Energy Corporation's creditors or as required by applicable law or regulation. Similarly, Talen Energy Corporation is not liable for the debts of its subsidiaries, nor are its subsidiaries liable for the debts of one another. Accordingly, creditors of Talen Energy Corporation's subsidiaries may not satisfy their debts from the assets of Talen Energy Corporation or its other subsidiaries absent a specific contractual undertaking by Talen Energy Corporation or its other subsidiaries to pay the creditors or as required by applicable law or regulation. Similarly, the subsidiaries of Talen Energy Supply are each separate legal entities. These subsidiaries are not liable for the debts of Talen Energy Supply. Accordingly, creditors of Talen Energy Supply may not satisfy their debts from the assets of their subsidiaries absent a specific contractual undertaking by a subsidiary to pay the creditors or as required by applicable law or regulation. Similarly, Talen Energy Supply is not liable for the debts of its subsidiaries, nor are the subsidiaries liable for the debts of one another. Accordingly, creditors of these subsidiaries may not satisfy their debts from the assets of Talen Energy Supply absent a specific contractual undertaking by that parent or other subsidiary to pay such creditors or as required by applicable law or regulation. As indicated above, certain debt agreements, including, but not limited to, the Talen Energy Supply RCF, the First Lien Credit and Guaranty Agreement and the Amended STF Agreement, include contractual undertakings by certain Talen Energy subsidiaries to guarantee the obligations of other Talen Energy entities arising under those agreements. Distribution Related Restrictions for Talen Energy Corporation Certain of Talen Energy's debt agreements include covenants that could effectively restrict the payment of distributions, loans or advances, either directly to Talen Energy Corporation or to Talen Energy Supply or one of its subsidiaries. At December 31, 2015 , $3.3 billion of Talen Energy Corporation subsidiaries net assets were restricted for the purposes of transferring funds to Talen Energy Corporation in the form of distributions, loans or advances. |
Acquisitions, Development and D
Acquisitions, Development and Divestitures | 12 Months Ended |
Dec. 31, 2015 | |
Acquisitions Development And Divestitures [Abstract] | |
Acquisitions, Development and Divestitures | Acquisitions, Development and Divestitures Talen Energy from time to time evaluates opportunities for potential acquisitions, divestitures and development projects. Development projects are periodically reexamined based on market conditions and other factors to determine whether to proceed with the projects, sell, cancel or expand them, execute tolling agreements or pursue other options. Any resulting transactions may impact future financial results. Acquisitions MACH Gen On November 2, 2015, Talen Energy completed the acquisition of the membership interests of MACH Gen for $603 million in cash consideration (based on estimated working capital). The final cash purchase price, after post-closing adjustments, was $600 million . The purchase price was funded by a borrowing under the Talen Energy Supply RCF and cash on hand. The Term Loan B and revolving credit facility of New MACH Gen remain outstanding following the completion of the transaction. See Note 5 for additional information. MACH Gen's total generating capacity is 2,344 MW (summer rating). The MACH Gen acquisition was accounted for as a business combination, with the identifiable tangible and intangible assets and liabilities of MACH Gen, recorded at their estimated fair values on the acquisition date. The acquisition is consistent with management's strategy of business growth, fuel type diversity and replacing the assets being divested as part of the FERC approval of the RJS Power acquisition. The following table summarizes the allocation of the purchase price to the fair values of the major classes of assets and liabilities of MACH Gen. Current assets (a) $ 31 Intangible assets 3 PP&E 1,275 Short-term debt (103 ) Current liabilities (28 ) Long-term debt (470 ) Deferred income taxes (108 ) Total purchase price $ 600 (a) Includes gross contractual amounts of accounts receivable acquired of $9 million , which approximates fair value. The purchase price allocation is considered by Talen Energy's management to be provisional due to pending finalization of valuations and could change materially in subsequent periods. Any changes to the provisional purchase price allocation during the measurement period that result in material changes to the consolidated financial results will be adjusted prospectively. The measurement period can extend up to a year from the date of acquisition. The items pending finalization include, but are not limited to, the valuation of PP&E, certain other assets and liabilities and deferred income taxes. Actual operating revenues and net income of MACH Gen, since the November 2, 2015 acquisition, included in Talen Energy's results for the year ended December 31, 2015 were: Operating Revenues Net Income (Loss) $ 28 $ (9 ) RJS Power On June 1, 2015, substantially contemporaneous with the spinoff by PPL to form Talen Energy, RJS Power was contributed by the Riverstone Holders to become a subsidiary of Talen Energy Supply in exchange for 44,974,658 shares of Talen Energy Corporation common stock. See Notes 1 and 3 for additional information on the spinoff and acquisition. In accordance with business combination accounting guidance, Talen Energy treated the combination with RJS Power as an acquisition and Talen Energy Supply is considered the acquirer of RJS Power. Accordingly, Talen Energy applied acquisition accounting to the assets and liabilities of RJS Power whereby the purchase price was allocated to the underlying tangible and intangible assets and liabilities based on their respective fair values as of June 1, 2015, with the remainder allocated to goodwill. The total consideration for the acquisition was deemed to be $902 million based on the fair value of the Talen Energy Corporation common stock issued for the acquisition using the June 1, 2015 closing "when-issued" market price. The following table summarizes the allocation of the purchase price to the fair values of the major classes of assets and liabilities of RJS, all of which represent non-cash activity excluded from the Statement of Cash Flows for the year ended December 31, 2015 . The purchase price allocation is considered by Talen Energy's management to be final as of December 31, 2015. Current assets (a) $ 168 Assets of discontinued operations (b) 375 PP&E 1,777 Other intangibles 46 Short-term debt (36 ) Current liabilities (224 ) Liabilities of discontinued operations (5 ) Long-term debt (1,244 ) Deferred income taxes (266 ) Other noncurrent liabilities (c) (82 ) Net identifiable assets acquired 509 Goodwill (d) 393 Net assets acquired $ 902 (a) Includes gross contractual amount of the accounts receivable acquired of $41 million , which approximates fair value. (b) See Note 14 for information on impairment charges recorded during 2015 related to the Sapphire plants initial classification as assets held for sale and discontinued operations. See Note 1 for additional information on the subsequent reclassification to assets held and used. (c) Includes $33 million of "out-of-the-money" coal contracts that will be amortized over the life of the contracts terms as the coal is consumed. (d) The allocation above is as of the acquisition date of June 1, 2015. As further discussed in Note 16 , goodwill was fully impaired during 2015, which included the goodwill recognized in the acquisition of RJS Power. Various purchase accounting valuation adjustments were made during the third and fourth quarters affecting certain current assets and liabilities, PP&E, other intangibles and related deferred income taxes resulting in a $5 million reduction in goodwill. The statement of income effect of these adjustments recorded during the measurement period was insignificant. Goodwill recorded as a result of the acquisition primarily reflected synergies expected to be achieved related to the spinoff and acquisition. The goodwill is not deductible for income tax purposes and was assigned to the East segment. See Note 16 for additional information related to the impairment of goodwill. Actual operating revenues and net income of RJS, since the June 1 acquisition, included in Talen Energy's results for the year ended December 31, 2015 were: Operating Revenues Net Income (Loss) (a) $ 528 $ (74 ) (a) Includes certain asset impairments and excludes the impact of the goodwill impairment recorded in 2015 subsequent to the acquisition. See Notes 14 and 16 for information on the impairments recorded. Pro Forma Information for RJS Power and MACH Gen Acquisitions Pro forma information (unaudited) for Talen Energy for the year ended December 31, as if both the RJS Power and MACH Gen acquisitions had occurred January 1, 2014, is as follows: Operating Revenues Income (Loss) After Tax from Continuing Operations 2015: Pro forma $ 5,109 $ (396 ) Basic and diluted earnings per share (for Talen Energy Corporation) (3.08 ) 2014: Pro forma 6,031 345 Basic and diluted earnings per share (for Talen Energy Corporation) 2.68 The unaudited pro forma financial information has been presented for illustrative purposes only and is not necessarily indicative of results of operations that would have been achieved had the acquisitions taken place on the date indicated, or the future consolidated results of operations of Talen Energy. The pro forma financial information presented above has been derived from the historical consolidated financial statements of Talen Energy and MACH Gen and from the historical consolidated and combined financial statements of RJS Power. The pro forma financial information presented above includes adjustments for (1) alignment of accounting policies, (2) incremental depreciation and amortization expense related to fair value adjustments to PP&E and identifiable intangible assets and liabilities, (3) incremental interest expense for outstanding borrowings to reflect the terms of the Talen Energy Supply RCF related to the RJS acquisition, (4) nonrecurring items (discussed below), (5) the tax effect of the above adjustments, and (6) the issuance of Talen Energy Corporation common stock in connection with the spinoff from PPL and the acquisition of RJS Power. The pro forma financial information presented includes the impact of impairments recorded during the third and fourth quarters of 2015. See Notes 14 and 16 for information on the impairments recorded. Nonrecurring acquisition, integration and other costs directly related to the acquisitions of $20 million were incurred during 2015 and recorded in "Operation and maintenance" on the Statements of Income. Adjustments were made in the calculation of pro forma amounts to remove the effect of these nonrecurring items and related income taxes. The pro forma financial information does not include adjustments for potential future cost savings for either acquisition. Divestitures Talen Renewable Energy In November 2015, Talen Energy completed the sale of Talen Renewable Energy for $116 million in cash and recorded a pre-tax gain on the sale of $10 million in the East segment, which is reflected in "Operation and maintenance" on the Statement of Income. Announced Divestitures Ironwood, Holtwood, Lake Wallenpaupack and C.P. Crane Power Plants In October 2015, Holtwood, LLC, a wholly owned, indirect subsidiary of Talen Energy, entered into an agreement to sell the Holtwood and Lake Wallenpaupack hydroelectric facilities in Pennsylvania for a purchase price of $860 million , subject to customary purchase price adjustments. The facilities have a combined summer rating operating capacity of 308 MW. The transaction is expected to close in March 2016, subject to customary closing conditions. In October 2015, Talen Generation entered into an agreement to sell Talen Ironwood Holdings, LLC, which through its subsidiaries owns and operates the Ironwood natural gas combined-cycle plant in Pennsylvania, for a purchase price of $657 million , subject to customary purchase price adjustments. In connection with the sale, in January 2016, Talen Energy repaid $41 million of indebtedness, plus a customary debt make-whole premium. The Ironwood unit has a summer rating operating capacity of 660 MW. The sale transaction closed in February 2016, with an estimated gain, net of transaction costs including the make-whole premium on the debt, of $159 million , which will be recorded to "Operating Income" on the Statement of Income in 2016. Proceeds from the sale of Ironwood were used to repay the majority of Talen Energy's short-term debt. In October 2015, Raven Power Marketing LLC, a wholly owned, indirect subsidiary of Talen Energy, entered into an agreement to sell C.P. Crane LLC, which owns and operates the C.P. Crane coal-fired power plant in Maryland. The C.P. Crane plant has a summer rating operating capacity of 402 MW. The transaction closed in February 2016. The transaction is not expected to have a significant impact on Talen Energy's financial condition or results of operations. See Notes 14 and 16 for information on impairments recorded in 2015 for this plant. The sales are part of the requirement to divest certain PJM assets to satisfy a December 2014 FERC order approving the combination with RJS Power. See Note 1 for information on the FERC order. At December 31, 2015, the major component of assets held for sale related to the sale of these businesses was primarily $936 million of PP&E which was included in the East segment. Talen Ironwood Holdings, LLC is considered an individually significant component whose pretax income (loss) attributable to Talen Energy for 2015, 2014, and 2013 was $73 million , $67 million , and $(22) million . Discontinued Operations Talen Montana Hydro Sale In November 2014, Talen Montana completed the sale to NorthWestern Corporation of 633 MW of hydroelectric generating facilities located in Montana for approximately $900 million in cash. The sale included 11 hydroelectric power facilities and related assets. Following are the components of discontinued operations in the Statement of Income for the years ended December 31 . 2014 2013 Operating revenues $ 117 $ 139 Gain on the sale (pre-tax) 306 — Interest expense (a) 9 12 Income (loss) before income taxes 332 49 Income (Loss) from Discontinued Operations (net of income taxes) 223 32 (a) Represents allocated interest expense based upon the discontinued operations share of the net assets of Talen Energy. Other To facilitate the sale of the Montana hydroelectric generating facilities discussed above, Talen Montana terminated, in December 2013, its operating lease arrangement related to partial interests in Units 1, 2 and 3 of the Colstrip coal-fired generating facility and acquired those interests, collectively, for $271 million . At lease termination, the existing lease-related assets on the balance sheet consisting primarily of prepaid rent and leasehold improvements were written off and the acquired Colstrip assets were recorded at fair value as of the acquisition date. Talen Energy recorded a charge of $697 million ( $413 million after-tax) for the termination of the lease included in "Loss on lease termination" on the 2013 Statements of Income. The $271 million payment is reflected in "Cash Flows from Operating Activities" on the 2013 Statement of Cash Flow. Development Bell Bend COLA In 2008, a Talen Energy subsidiary, Bell Bend, LLC (Bell Bend) submitted a COLA to the NRC for the proposed Bell Bend nuclear generating unit (Bell Bend) to be built adjacent to the Susquehanna plant. Also in 2008, Bell Bend submitted Parts I and II of an application for a federal loan guarantee for Bell Bend to the DOE. In February 2014, the DOE announced the first loan guarantee for a nuclear project in Georgia. Although eight of the ten applicants that submitted Part II applications remain active in the DOE program, the DOE has stated that the $18.5 billion currently appropriated to support new nuclear projects would not likely be enough for more than three projects. Bell Bend submits quarterly application updates for Bell Bend to the DOE to remain active in the loan guarantee application process. The NRC continues to review the COLA. Bell Bend does not expect to complete the COLA review process with the NRC prior to 2018. Bell Bend has made no decision to proceed with construction and expects that such decision will not be made for several years given the anticipated lengthy NRC license approval process. Additionally, Bell Bend does not expect to proceed with construction absent favorable economics, a joint arrangement with other interested parties and a federal loan guarantee or other acceptable financing. Bell Bend is currently authorized by Talen Energy Corporation's Board of Directors to spend up to $256 million on the COLA and other permitting costs necessary for construction. At December 31, 2015 and 2014 , $201 million and $188 million of costs, which includes capitalized interest, associated with the licensing application were capitalized and are included on the Balance Sheets in noncurrent "Other intangibles." Talen Energy continues to support the Bell Bend licensing project with a near term focus on obtaining the final environmental impact statement. Talen Energy placed the NRC safety review (which supports issuance of their final safety evaluation report, the other key element of the COLA) on hold in 2014, due to a lack of progress by the reactor vendor with respect to its NRC design certification process, which is a prerequisite to the COLA. Brunner Island Co-firing Project Talen Energy is in the process of making modifications to its Brunner Island coal-fired generating facility to be able to co-fire using natural gas to better position the plant for low gas price environments. Construction is under way and is expected to be completed by the end of 2016. The project is expected to cost $118 million . At December 31, 2015 and 2014 , $23 million and $5 million of costs, which include capitalized interest, associated with the project were capitalized and are included in "Construction work in progress" on the Balance Sheets. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2015 | |
Leases [Abstract] | |
Leases | Leases Talen Energy and its subsidiaries have entered into various agreements for the lease of office space, vehicles, land, gas storage and other equipment. At December 31, 2015 , Talen Energy's most significant lease, which expires in 2018, relates to its corporate headquarters. Rent expense for the years ended December 31 for operating leases was as follows: 2015 2014 2013 $ 14 $ 29 $ 55 Total future minimum rental payments for all operating leases are estimated to be: 2016 2017 2018 2019 2020 Thereafter Total $ 19 $ 18 $ 8 $ 5 $ 5 $ 26 $ 81 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock Incentive Plan Talen Energy Corporation grants share-based compensation to eligible participants under the Talen Energy Stock Incentive Plan (SIP). Under the SIP, restricted shares of Talen Energy Corporation stock, restricted stock units, performance units, stock options and stock appreciation rights may be granted to officers, directors and other key employees. Additionally, Talen Energy Corporation will match shares of its common stock purchased by certain employees on the open market from June 1, 2015 through March 31, 2018 with grants of restricted stock units, subject to certain restrictions (Matching Grants). Awards under the SIP are made by the Compensation, Governance and Nominating Committee (CGNC) of the Talen Energy Corporation Board of Directors or its delegate. The total number of shares which may be issued under the plan is 5,630,000 and the maximum number of shares for which stock options may be granted is 2,000,000 . Shares delivered under the SIP may be in the form of authorized and unissued Talen Energy Corporation common stock or common stock held in treasury by Talen Energy Corporation. Restricted Stock Units Restricted stock units are awards based on the fair value of a share of Talen Energy Corporation common stock on the date of grant. Actual Talen Energy Corporation common shares will be issued upon completion of a vesting period of three years, aside from Matching Grants that generally vest two years from the date of grant. Substantially all restricted stock unit awards are expected to vest. The fair value of restricted stock units granted is recognized as compensation expense on a straight-line basis over the service period. Restricted stock units are subject to forfeiture or accelerated payout under the pertinent award agreement provisions for termination, disability and death of employees. Restricted stock units vest fully, in certain situations, as defined by in the applicable award agreement. The total restricted stock units granted, nonvested and outstanding through December 31, 2015 was 265,849 and the weighted-average grant date fair value per share was $18.74 . Stock Options Stock options have been granted with an option exercise price per share not less than the fair value of Talen Energy Corporation's common stock on the date of grant. Options become exercisable in equal installments over a three -year service period beginning one year after the date of grant, assuming the individual is still employed by Talen Energy or a subsidiary. The CGNC has discretion to accelerate the exercisability of the options. All options expire no later than ten years from the grant date. The options become exercisable immediately in certain situations, as defined by the pertinent award agreement. The fair value of options granted is recognized as compensation expense on a straight-line basis over the service period. Substantially all stock option awards are expected to vest. The total stock options granted, nonvested and outstanding through December 31, 2015 was 991,101 and the grant date fair value per share was $4.91 . The weighted-average exercise price per share is $19.00 and the weighted-average remaining contractual term is 9.4 years . The stock options outstanding at December 31, 2015 are currently out of the money. The fair value of each option granted is estimated using a Black-Scholes option-pricing model. Talen Energy uses a risk-free interest rate, expected option life and expected volatility to value its stock options. Talen Energy Corporation does not currently expect to pay dividends, therefore a dividend yield assumption is not used to value stock options. The risk-free interest rate reflects the yield for a U.S. Treasury Strip available on the date of grant with constant rate maturity approximating the option's expected life. Expected life was calculated using the simplified method described in SEC Staff Accounting Bulletin (SAB) 107/110 (updated by SAB 110). Expected volatility is derived from the historical volatility of a peer group selected by management as Talen Energy Corporation's common stock does not have a trading history. The assumptions used in the model were: Risk-free interest rate 2.05 % Expected option life 6.00 years Expected stock volatility 21.55 % Performance Units Performance units represent a target number of shares of Talen Energy Corporation's common stock that the recipient would receive upon Talen Energy Corporation's attainment of an applicable performance goal. For awards granted in 2015, Talen Energy Corporation uses TSR, which is determined based on TSR during a three -year performance period. At the end of the performance period, payout is determined by comparing Talen Energy Corporation's TSR to the TSR of peer group companies that Talen Energy Corporation has selected. Awards are payable on a graduated basis, based on thresholds that measure Talen Energy Corporation's performance relative to the peer group companies, on which each years' awards are measured. Awards can be paid up to 200% of the target award or forfeited with no payout if performance is below a minimum established performance threshold. Under the pertinent award agreement provisions, performance units are subject to forfeiture upon termination of employment except for in the event of a disability or death of an employee, in which case the total performance units remain outstanding and are eligible for vesting through the conclusion of the performance period. The fair value of performance units is recognized as compensation expense on a straight-line basis over the three-year performance period. Performance units vest on a pro rata basis, in certain situations, as defined by the applicable award agreement. The fair value of performance units granted was estimated using a Monte Carlo pricing model that values market based performance conditions such as TSR. The model assumed an expected stock volatility of 31.8% that was based on the historical volatility based on daily stock price changes of peer group companies. The total performance units granted, nonvested and outstanding through December 31, 2015 was 158,900 and the weighted-average grant date fair value was $21.17 per share. Directors Deferred Compensation Plan Under the Talen Energy Corporation Directors Deferred Compensation Plan, or DDCP, stock units are granted to eligible directors of Talen Energy Corporation in connection with their retainers for service on Talen Energy Corporation’s board of directors and its committees. Stock units are based on the fair market value of a share of Talen Energy Corporation’s common stock on the date of grant. The total number of stock units granted under the DDCP through December 31, 2015 was 34,967 and the weighted average grant date fair value was $13.23 per share. Compensation Expense The year ended December 31, 2015 includes an insignificant amount of compensation expense for Talen Energy Corporation restricted stock units, performance units and stock options accounted for as equity awards. The year ended December 31, 2014 includes compensation expense of $33 million and the associated income tax benefit of $14 million for restricted stock, restricted stock units, performance units and stock options accounted for as equity awards from PPL, which included an allocation of PPL Services' expense. The year ended December 31, 2013 includes compensation expense of $27 million and the associated income tax benefit of $11 million for restricted stock, restricted stock units, performance units and stock options accounted for as equity awards from PPL, which included an allocation of PPL Services' expense. At December 31, 2015, unrecognized compensation expense and the weighted-average period for recognition related to nonvested restricted stock units, performance units and stock option awards from Talen Energy was $11 million and 2.4 years . Prior to the spinoff, restricted shares of PPL common stock and related restricted stock units, performance units and stock options were granted to officers and other key employees of Talen Energy. At December 31, 2014 , these employees of Talen Energy had 1,457,900 of unvested shares of restricted stock and restricted stock units, 291,492 of performance units and 2,745,016 of outstanding stock options issued by PPL. The vesting of these awards was accelerated in 2015 in connection with the spinoff from PPL. See Note 1 for information on the recording of expense related to this acceleration and additional information on the spinoff from PPL. For the year ended December 31, 2015 , compensation expense for these awards, excluding the acceleration, but including an allocation of PPL Services' compensation expense for similar awards, was $18 million . |
Retirement and Postemployment B
Retirement and Postemployment Benefits | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Retirement and Postemployment Benefits | Retirement and Postemployment Benefits Prior to the June 1, 2015 spinoff, the majority of Talen Energy Supply's employees were eligible for pension benefits under a PPL non-contributory defined benefit pension plan, with benefits based on length of service and either career average pay or final average pay, as defined by the plan. Prior to the June 1, 2015 spinoff, this plan was closed to all newly hired employees. Newly hired employees were eligible to participate in a PPL 401(k) savings plan with enhanced employer contributions. Talen Energy was allocated costs of the PPL pension plan based on its employees' participation in the plan. Employees who participated in this PPL pension plan who became employees of Talen Energy Supply transferred into a newly created pension plan sponsored by Talen Energy Supply, which provides benefits similar to that of the PPL pension plan. Prior to the June 1, 2015 spinoff, the majority of Talen Energy Supply's employees were also eligible for certain health care and life insurance benefits upon retirement through the PPL other postretirement benefit plans, which prior to June 1, 2015, were closed to all newly hired employees. Talen Energy Supply was allocated costs of the PPL plans based on its employees' participation in the plans. Employees who participated in the health care and life insurance plans and who became employees of Talen Energy Supply transferred into the newly created Talen Energy other postretirement benefit plans sponsored by Talen Energy Supply, which provide benefits similar to those of the PPL other postretirement benefit plans. A remeasurement of the assets and the obligations for the PPL pension and other postretirement benefit plans was performed as of May 31, 2015 in order to separate the assets and obligations of the PPL plans attributable to Talen Energy, as required by the spinoff agreements. The Talen Energy pension plan assumed from PPL the pension benefit obligations for active plan participants who became employees of Talen Energy in connection with the spinoff and for individuals who terminated employment from Talen Energy Supply on or after July 1, 2000. A portion of the PPL pension plan assets were also allocated to the new Talen Energy pension plan. The asset allocation was based on the rules prescribed by ERISA (Employee Retirement Income Security Act) for allocating assets in connection with a pension plan spinoff. The Talen Energy other postretirement benefit plans assumed the other postretirement benefit obligations from PPL for active plan participants who became employees of Talen Energy in connection with the spinoff. PPL retained obligations attributable to existing retirees as of the date of the spinoff. A portion of the PPL other postretirement benefit plan assets, which were held in VEBA trusts and a 401(h) account, were also allocated to the new Talen Energy other postretirement benefit plans. The asset allocation was determined separately for each funding vehicle based on the ratio of the accumulated postretirement benefit obligation (APBO) assumed by Talen Energy to the total APBO attributed to each funding vehicle. As a result of the above, the net funded status of the new Talen Energy pension and other postretirement benefit plans at June 1, 2015 was a liability of $257 million . The majority of Talen Montana's employees are eligible for pension benefits under a cash balance plan. Effective January 1, 2012, that plan was closed to all newly hired salaried employees. Effective September 1, 2014, that plan was closed to all newly hired bargaining unit employees. Newly hired employees are eligible to participate in a 401(k) savings plan with enhanced employer contributions. The majority of Talen Montana's employees are also eligible for certain health care and life insurance benefits upon retirement, under a retiree health plan sponsored by Talen Montana, which is now closed to newly hired employees. There were no changes to the pension and other postretirement benefit plans for employees of Talen Montana as a result of the spinoff transaction. However, PPL retained the liability for other postretirement benefits attributable to existing retirees of Talen Montana as of the date of the spinoff. Employees of certain of Talen Energy's mechanical contracting companies are eligible for benefits under multiemployer plans sponsored by various unions. The following table provides the components of net periodic defined benefit costs for Talen Energy pension and other postretirement plans for the years ended December 31 , for which the 2015 periods include seven months of costs under the newly formed Talen Energy plans and a full year of Talen Montana plans. Pension Benefits Other Postretirement Benefits 2015 2014 2013 2015 2014 2013 Net periodic defined benefit costs (credits): Service cost $ 31 $ 5 $ 7 $ 2 $ — $ 1 Interest cost 46 9 8 2 1 — Expected return on plan assets (60 ) (11 ) (10 ) (3 ) — — Amortization of: Actuarial (gain) loss 16 2 3 — — — Curtailment charges (credits) — — — — (1 ) — Net periodic defined benefit costs (credits) $ 33 $ 5 $ 8 $ 1 $ — $ 1 Pension Benefits Other Postretirement Benefits 2015 2014 2013 2015 2014 2013 Other changes in plan assets and benefit obligations recognized in OCI: Curtailments $ — $ — $ — $ — $ 1 $ — Net (gain) loss 54 26 (15 ) — (1 ) (1 ) Prior service cost (credit) 3 — — — — (3 ) Amortization of: Actuarial gain (loss) (16 ) (2 ) (3 ) — — — Prior service credit (cost) — — — 1 — — Total recognized in OCI 41 24 (18 ) 1 — (4 ) Total recognized in net periodic defined benefit costs and OCI $ 74 $ 29 $ (10 ) $ 2 $ — $ (3 ) Actuarial loss of $20 million related to these plans is expected to be amortized from AOCI into net periodic defined benefit costs in 2016. The following net periodic defined benefit costs (credits) were charged to operating expense, excluding amounts charged to construction and other non-expense accounts. Pension Benefits Other Postretirement Benefits 2015 2014 2013 2015 2014 2013 $ 48 $ 39 $ 45 $ 2 $ 3 $ 6 In the table above, amounts include costs for the specific plans sponsored by Talen Energy and its subsidiaries and the following allocated costs of the PPL pension and other postretirement benefit plans prior to the spinoff, based on Talen Energy Supply's participation in those plans, which management believes were reasonable at the time: Pension Benefits Other Postretirement Benefits 2015 2014 2013 2015 2014 2013 $ 16 $ 34 $ 38 $ — $ 3 $ 5 At December 31, 2014 or June 1, 2015, as applicable, the plan sponsors adopted the mortality tables issued by the Society of Actuaries in October 2014 (RP-2014 base tables) for all applicable defined benefit pension and other postretirement benefit plans. At December 31, 2014 or June 1, 2015, as applicable, the plan sponsors also selected the IRS BB 2-Dimensional mortality improvement scale on a generational basis for all applicable defined benefit pension and other postretirement benefit plans. These mortality assumptions reflect the recognition of both improved life expectancies and the expectation of continuing improvements in life expectancies. The following weighted-average assumptions were used in the valuation of the benefit obligations at December 31 . Pension Benefits Other Postretirement Benefits 2015 2014 2015 2014 Discount rate 4.65 % 4.28 % 4.60 % 3.81 % Rate of compensation increase 3.98 % 4.03 % 3.98 % 4.03 % The following weighted-average assumptions were used to determine the net periodic defined benefit costs for Talen Energy's plans for the years ended December 31 . Pension Benefits Other Postretirement Benefits 2015 2014 2013 2015 2014 2013 Discount rate 4.41 % 5.18 % 4.25 % 4.27 % 4.51 % 3.77 % Rate of compensation increase 3.99 % 3.94 % 3.95 % 3.99 % 3.94 % 3.95 % Expected return on plan assets (a) 7.00 % 7.00 % 7.00 % 6.37 % N/A N/A (a) The expected long-term rates of return for pension and other postretirement benefits are based on management's projections using a best-estimate of expected returns, volatilities and correlations for each asset class. Each plan's specific current and expected asset allocations are also considered in developing a reasonable return assumption. The following table provides the assumed health care cost trend rates for the years ended December 31 . 2015 2014 2013 Health care cost trend rate assumed for next year obligations 6.80 % 7.20 % 7.60 % costs 7.20 % 7.60 % 8.00 % Rate to which the cost trend rate is assumed to decline (the ultimate trend) obligations 5.00 % 5.00 % 5.00 % costs 5.00 % 5.00 % 5.50 % Year that the rate reaches the ultimate trend rate obligations 2020 2020 2020 costs 2020 2020 2019 A one percentage point change in the assumed health care costs trend rate assumption would have been insignificant to the other postretirement benefit plans in 2015 . The funded status of Talen Energy's plans at December 31 was as follows: Pension Benefits Other Postretirement Benefits 2015 2014 2015 2014 Change in Benefit Obligation Benefit obligation, beginning of period $ 210 $ 163 $ 10 $ 12 Transfer of benefit obligation at spinoff (a) 1,416 — 80 — Service cost 31 5 2 — Interest cost 46 9 2 1 Plan amendments 3 — — — Actuarial (gain) loss (41 ) 38 (4 ) (1 ) Net Transfers in (out) — — (3 ) — Curtailments — — — (1 ) Gross benefits paid (51 ) (5 ) — (1 ) Benefit obligation, end of period $ 1,614 $ 210 $ 87 $ 10 Change in Plan Assets Plan assets at fair value, beginning of period $ 170 $ 147 $ — $ — Transfer of plan assets at fair value at spinoff (a) 1,159 — 80 — Actual return on plan assets (35 ) 22 (2 ) — Employer contributions 32 6 1 1 Gross benefits paid (52 ) (5 ) (1 ) (1 ) Plan assets at fair value, end of period 1,274 170 78 — Funded status end of period $ (340 ) $ (40 ) $ (9 ) $ (10 ) Amounts recognized in the Balance Sheets consist of: Current Liability $ — $ — $ — $ (1 ) Noncurrent liability (340 ) (40 ) (9 ) (9 ) Net amount recognized, end of period $ (340 ) $ (40 ) $ (9 ) $ (10 ) Amounts recognized in AOCI (pre-tax) consist of: Prior service cost (credit) $ 2 $ — $ (5 ) $ (4 ) Net actuarial (gain) loss 451 59 8 — Total $ 453 $ 59 $ 3 $ (4 ) Total accumulated benefit obligation for defined benefit pension plans $ 1,500 $ 210 (a) Values determined as of the spinoff date as discussed above. Talen Energy's pension plans had projected and accumulated benefit obligations in excess of the fair value of plan assets at December 31, 2015 and 2014. In addition to the plans it sponsors, Talen Energy Supply and its subsidiaries were allocated a portion of the funded status and costs of the defined benefit plans sponsored by PPL Services based on their participation in those plans prior to the spinoff, which management believes were reasonable at that time. The actuarially determined obligations of current active employees were used as a basis to allocate total plan activity, including active and retiree costs and obligations. Allocations to Talen Energy Supply resulted in liabilities at December 31, 2014 as follows: Pension plans $ 259 Other postretirement benefit plans 34 Talen Energy's mechanical contracting subsidiaries make contributions to over 60 multiemployer pension plans, based on the bargaining units from which labor is procured. The risks of participating in these multiemployer plans are different from single-employer plans in the following aspects: • Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers . • If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. • If Talen Energy's mechanical contracting subsidiaries choose to stop participating in some of their multiemployer plans, they may be required to pay those plans an amount based on the unfunded status of the plan, referred to as a withdrawal liability. Talen Energy identified the Steamfitters Local Union No. 420 Pension Plan, EIN/Plan Number 23-2004424/001 as the plan to which the most significant contributions are made. Contributions to this plan by Talen Energy's mechanical contracting companies were $5 million for 2015, 2014 and 2013. At the date the financial statements were issued, the Form 5500 was not available for the plan year ending in 2015. Therefore, the following disclosures specific to this plan are being made based on the Form 5500s filed for the plan years ended December 31, 2014 and 2013. Talen Energy's mechanical contracting subsidiary H.T. Lyons was identified individually as a greater than 5% contributor on the Form 5500s. The plan had a Pension Protection Act zone status of red, without utilizing an extended amortization period, as of December 31, 2014 and 2013. In addition, the plan is subject to a rehabilitation plan and surcharges have been applied to participating employer contributions. The expiration date of the collective-bargaining agreement related to those employees participating in this plan is September 18, 2016. There were no other plans deemed individually significant based on a multifaceted assessment. Talen Energy's mechanical contracting subsidiaries also participate in multiemployer other postretirement plans that provide for retiree life insurance and health benefits. The table below details total contributions to all multiemployer pension and other postretirement plans, including the plan identified as significant above. The contribution amounts fluctuate each year based on the volume of work and type of projects undertaken from year to year. 2015 2014 2013 Pension plans $ 34 $ 40 $ 36 Other postretirement benefit plans 26 33 32 Total contributions $ 60 $ 73 $ 68 Plan Assets At December 31, 2015 , Talen Energy's pension plans are invested in the Talen Energy Retirement Plans Master Trust (the Master Trust) that also includes a 401(h) account that is restricted for certain other postretirement benefit obligations of Talen Energy. Prior to the spinoff from PPL, the pension plan assets were invested by PPL in a master trust maintained by PPL. The investment strategy for the Master Trust is to achieve a risk-adjusted return on a mix of assets that, in combination with Talen Energy's funding policy, will ensure that sufficient assets are available to provide long-term growth and liquidity for benefit payments, while also managing the duration of the assets to complement the duration of the liabilities. The Master Trust benefits from a wide diversification of asset types, investment fund strategies and external investment fund managers, and therefore has no significant concentration of risk. The investment policy of the Master Trust outlines investment objectives and defines the responsibilities of the Retirement Plan Committee of Talen Energy Corporation, which is the named fiduciary, external investment managers, investment advisor and trustee and custodian. The investment policy is reviewed annually by Talen Energy Corporation's Board of Directors. The Retirement Plan Committee created a risk management framework around the trust assets and pension liabilities. This framework considers the trust assets as being composed of three sub-portfolios: growth, immunizing and liquidity portfolios. The growth portfolio is comprised of investments that generate a return at a reasonable risk, including equity securities, certain debt securities and alternative investments. The immunizing portfolio consists of debt securities, generally with long durations, and derivative positions. The immunizing portfolio is designed to offset a portion of the change in the pension liabilities due to changes in interest rates. The liquidity portfolio consists primarily of cash and cash equivalents. Target asset allocation ranges have been developed for the Master Trust based on input from external consultants with a goal of limiting funded status volatility. The Retirement Plan Committee monitors the investments in the Master Trust, and seeks to obtain a target portfolio that emphasizes reduction of risk of loss from market volatility. In pursuing that goal, the Retirement Plan Committee establishes revised guidelines from time to time. The asset allocation for the trust and the target allocation prescribed by the investment guidelines by portfolio at December 31 are as follows: Percentage of trust assets Target Asset Allocation 2015 2015 Growth Portfolio 52 % 55 % Equity securities 24 % Debt securities (a) 14 % Alternative investments 14 % Immunizing Portfolio 46 % 44 % Debt securities (a) 40 % Derivatives 6 % Liquidity Portfolio 2 % 1 % Total 100 % 100 % (a) Includes commingled debt funds, which Talen Energy treats as debt securities for asset allocation purposes. Prior to the spinoff, the assets of the Talen Montana pension plan were invested solely in a master trust maintained by PPL. The fair value of this plan's assets of $170 million at December 31, 2014 represented an interest of approximately 4% in PPL's master trust. The fair value of net assets in the Master Trust by asset class and level within the fair value hierarchy was: December 31, 2015 Fair Value Measurement Using Total Level 1 Level 2 Level 3 Talen Energy Retirement Plans Master Trust Cash and cash equivalents $ 108 $ 108 $ — $ — Equity securities: U.S.: Large-cap 90 23 67 — Small-cap 33 33 — — International 190 — 190 — Commingled debt 273 — 273 — Debt securities: U.S. Treasury and U.S. government sponsored agency 192 189 3 — Corporate 231 — 231 — International government 1 — 1 — Other 3 — 3 — Alternative investments: Commodities 28 — 28 — Real estate 48 — 48 — Private equity 31 — — 31 Hedge funds 69 — 69 — Derivatives: Interest rate swaps 32 — 32 — Other 5 — 5 — Talen Energy Retirement Plans Master Trust assets, at fair value $ 1,334 $ 353 $ 950 $ 31 Receivables and payables, net (a) (31 ) 401(h) accounts restricted for other postretirement benefit obligations (29 ) Total Talen Energy Retirement Plans Master Trust pension assets $ 1,274 (a) Receivables and payables represent amounts for investments sold/purchased, but not yet settled along with interest and dividends earned, but not yet received. A reconciliation of the Master Trust assets classified as Level 3 at December 31, 2015 is as follows: Private equity Balance at beginning of period $ — Acquisitions (a) 35 Purchases, sales and settlements (4 ) Balance at end of period $ 31 (a) Transferred from a master trust maintained by PPL. The fair value measurements of cash and cash equivalents are based on the amounts on deposit. The market approach is used to measure fair value of equity securities. The fair value measurements of equity securities (excluding commingled funds), which are generally classified as Level 1, are based on quoted prices in active markets. These securities represent actively and passively managed investments that are managed against various equity indices. Investments in commingled equity and debt funds are categorized as equity securities and are classified as Level 2. The fair value measurements for Level 2 investments are based on firm quotes of net asset values per share, which are not considered obtained from a quoted price in an active market. Investments in commingled equity funds include funds that invest in U.S. and international equity securities. Investments in commingled debt funds include funds that invest in a diversified portfolio of emerging market debt obligations, as well as funds that invest in investment grade long-duration fixed-income securities. The fair value measurements of debt securities are generally based on evaluations that reflect observable market information, such as actual trade information for identical securities or for similar securities, adjusted for observable differences. The fair value of debt securities is generally measured using a market approach, including the use of pricing models which incorporate observable inputs. Common inputs include benchmark yields, relevant trade data, broker/dealer bid/ask prices, benchmark securities and credit valuation adjustments. When necessary, the fair value of debt securities is measured using the income approach, which incorporates similar observable inputs as well as payment data, future predicted cash flows, collateral performance and new issue data. For the Master Trust, these securities represent investments in securities issued by U.S. Treasury and U.S. government sponsored agencies; investments securitized by pooled loans; investments in investment grade and non-investment grade bonds issued by U.S. companies across several industries and investments in debt securities issued by foreign governments and corporations. Investments in commodities represent ownership interest of a commingled fund that is invested in a portfolio of exchange-traded futures and forward contracts in commodities to obtain broad exposure to all principal groups in the global commodity markets, including energy, agriculture, livestock and metals (both precious and industrial) using proprietary commodity trading strategies. Redemptions can be made the 15th calendar day and last calendar day of the month with a specified notification period. The fund's fair value is based upon a value as calculated by the fund's administrator. Investments in real estate represent an investment in a partnership whose purpose is to manage investments in core U.S. real estate properties diversified geographically and across major property types (e.g., office, industrial, retail, etc.). The manager is focused on properties with high occupancy rates with quality tenants. This results in a focus on high income and stable cash flows with appreciation being a secondary factor. Core real estate generally has a lower degree of leverage when compared with more speculative real estate investing strategies. The partnership has limitations on the amounts that may be redeemed based on available cash to fund redemptions. Additionally, the general partner may decline to accept redemptions when necessary to avoid adverse consequences for the partnership, including legal and tax implications, among others. The fair value of the investment is based upon a partnership unit value. Investments in private equity represent interests in partnerships in private equity fund of funds that use a number of diverse investment strategies. Two of the partnerships have limited lives of ten years, while the third has a life of 15 years, after which liquidating distributions will be received. Prior to the end of each partnership's life, the investment cannot be redeemed with the partnership; however, the interest may be sold to other parties, subject to the general partner's approval. The Master Trust has unfunded commitments of $12 million that may be required during the lives of the partnerships. Fair value is based on an ownership interest in partners' capital to which a proportionate share of net assets is attributed. Investments in hedge funds represent investments in three hedge fund of funds. Hedge funds seek a return utilizing a number of diverse investment strategies. The strategies, when combined aim to reduce volatility and risk while attempting to deliver positive returns under most market conditions. Major investment strategies for the hedge fund of funds include long/short equity, market neutral, distressed debt, and relative value. Generally, shares may be redeemed within 60 to 95 days with prior written notice. The funds are subject to short term lockups and have limitations on the amount that may be withdrawn based on a percentage of the total net asset value of the fund, among other restrictions. All withdrawals are subject to the general partner's approval. The fair value for two of the funds has been estimated using the net asset value per share and the third fund's fair value is based on an ownership interest in partners' capital to which a proportionate share of net assets is attributed. The fair value measurements of derivative instruments utilize various inputs that include quoted prices for similar contracts or market-corroborated inputs. In certain instances, these instruments may be valued using models, including standard industry models. These instruments primarily include interest rate swaps, which are valued based on the swap details, such as swap curves, notional amount, index and term of index, reset frequency and payer/receiver credit ratings. Plan Assets - Other Postretirement Benefit Plans Prior to the spinoff from PPL, the other postretirement benefit plan assets were invested by PPL in VEBA trusts and a 401(h) account, maintained by PPL. The investment strategy with respect to other postretirement benefit obligations is to fund VEBA trusts and/or 401(h) accounts with voluntary contributions, when appropriate, and to invest in a tax efficient manner. Excluding the 401(h) accounts included in the Master Trust, other postretirement benefit plans are invested in a mix of assets for long-term growth with an objective of earning returns that provide liquidity as required for benefit payments. These plans benefit from diversification of asset types, investment fund strategies and investment fund managers, and therefore, have no significant concentration of risk. Equity securities include investments in domestic large-cap commingled funds. Ownership interests in commingled funds that invest entirely in debt securities are classified as equity securities, but treated as debt securities for asset allocation and target allocation purposes. Ownership interests in money market funds are treated as cash and cash equivalents for asset allocation and target allocation purposes. The asset allocation for the VEBA trusts and the target allocation, by asset class, at December 31 are detailed below. Percentage of plan assets Target Asset Allocation 2015 2015 Asset Class U.S. Equity securities 53 % 45 % Debt securities 46 % 50 % Cash and cash equivalents 1 % 5 % Total 100 % 100 % The fair value of assets in the other postretirement benefit plans by asset class and level within the fair value hierarchy was: December 31, 2015 Fair Value Measurement Using Total Level 1 Level 2 Level 3 U.S. Equity securities: Large-cap $ 26 $ — $ 26 $ — Commingled debt 23 — 23 — Total VEBA trust assets, at fair value 49 $ — $ 49 $ — 401(h) account assets 29 Total other postretirement benefit plan assets $ 78 Investments in large-cap equity securities represent investments in a passively managed equity index fund that invests in securities and a combination of other collective funds. Fair value measurements are not obtained from a quoted price in an active market but are based on firm quotes of net asset values per share as provided by the trustee of the fund. Redemptions can be made daily on this fund. Investments in commingled debt securities represent investments in a fund that invests in a diversified portfolio of investment grade long-duration fixed income securities. Redemptions can be made weekly on these funds. Expected Cash Flows - Defined Benefit Plans Talen Energy Supply's defined benefit pension plans have the option to utilize available prior year credit balances to meet current and future contribution requirements. Talen Energy expects to contribute $40 million to its defined benefit pension plans in 2016. Talen Energy is not required to make contributions to its other postretirement benefit plans. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid by the plans. Pension Other Postretirement Benefit Payment 2016 $ 75 $ 2 2017 81 3 2018 87 5 2019 92 7 2020 98 9 2021-2025 538 63 Savings Plans Substantially all employees of Talen Energy are eligible to participate in deferred savings plans (401(k)s). Employer contributions to the plans were $16 million in 2015 , $14 million in 2014 and $12 million in 2013 . Separation Benefits Talen Energy Supply and certain subsidiaries provide separation benefits to eligible employees. These benefits may be provided in the case of separations due to performance issues, loss of job related qualifications or organizational changes. Generally, applicable employees separated are eligible for cash severance payments, outplacement services and a single sum payment approximating the dollar amount of premium payments that would be incurred for continuation of group health and welfare coverage. Separation benefits for certain bargaining unit employees also include enhanced pension and postretirement medical benefits. Separation benefits are recorded when such amounts are probable and estimable. See Note 1 for a discussion of separation benefits related to the spinoff and Note 11 for a discussion of separation benefits related to the one-time voluntary retirement window offered in 2014 to certain bargaining unit employees as part of the new three -year labor agreement with IBEW local 1600. Separation benefits were not significant in 2013. |
Jointly Owned Facilities
Jointly Owned Facilities | 12 Months Ended |
Dec. 31, 2015 | |
Regulated Operations [Abstract] | |
Jointly Owned Facilities | Jointly Owned Facilities At December 31, 2015 and 2014 the Talen Energy Balance Sheets reflect the owned interests in the facilities below. Ownership Interest Electric Plant Other Property Accumulated Depreciation Construction Work in Progress December 31, 2015 Generating Plants Susquehanna 90.00 % $ 4,791 $ — $ 3,639 $ 148 Conemaugh 16.25 % 326 — 156 7 Keystone 12.34 % 218 — 111 3 Colstrip Units 1 & 2 50.00 % 48 — 5 2 Colstrip Units 3 30.00 % 30 — 2 3 Merill Creek Reservoir 8.37 % — 22 16 — December 31, 2014 Generating Plants Susquehanna 90.00 % $ 4,746 $ — $ 3,591 $ 117 Conemaugh 16.25 % 330 — 141 2 Keystone 12.34 % 213 — 102 2 Colstrip Units 1 & 2 50.00 % 16 — 4 3 Colstrip Unit 3 30.00 % 16 — 2 2 Merill Creek Reservoir 8.37 % — 22 15 — Each subsidiary owning these interests provides its own funding for its share of the facility. Each receives a portion of the total output of the generating plants equal to its percentage ownership. The share of fuel and other operating costs associated with the plants is included in the corresponding operating expenses on the Statements of Income. Talen Montana and NorthWestern have a sharing agreement that governs each party's responsibilities and rights relating to the operation of Colstrip Units 3 and 4. Under the terms of that agreement, each party is responsible for 15% of the total non-coal operating and construction costs of Colstrip Units 3 and 4, regardless of whether a particular cost is specific to Colstrip Unit 3 or 4, and is entitled to take up to the same percentage of the available generation from Units 3 and 4. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Energy Purchase and Sales Commitments Energy Purchase Commitments Talen Energy enters into long-term energy and energy related contracts which include commitments to purchase: Contract Type Fuels (a) Limestone Natural Gas Storage Natural Gas Transportation Power, excluding wind RECs Wind Power Maximum Maturity Date 2027 2030 2026 2034 2021 2020 2027 (a) As a result of depressed wholesale market prices for electricity and natural gas. Talen Energy has experienced a shift in the dispatching of its generation fleet from coal-fired to combined-cycle natural gas-fired generation. This reduction in coal-fired generation output has resulted in a surplus of coal inventory at certain of Talen Energy's Pennsylvania plants. To mitigate the risk of oversupply, Talen Energy incurred pre-tax charges of $41 million during 2015 in connection with an agreement to reduce its 2015 through 2018 contracted coal deliveries. These charges were recorded to "Fuel" on the Statement of Income. Energy Sale Commitments In connection with its marketing activities or hedging strategies for its power plants, Talen Energy has entered into long-term power sales contracts that extend into 2020 . Legal Matters Legal Proceedings Talen Energy is involved in the following legal proceedings, claims and litigation. Talen Energy believes that it has meritorious defenses in connection with its current legal proceedings, claims and litigation, and it intends to vigorously contest each of them. However, there can be no assurance that it will be successful in its efforts. No estimate of the possible loss or range of loss in excess of amounts accrued, if any, can be made at this time regarding any of the matters specifically described below because the inherently unpredictable nature of legal proceedings may be exacerbated by various factors such as ongoing discovery, significant facts that are in dispute, the stage of the proceeding and the wide range of potential outcomes for any such matter. As a result, any losses actually incurred could be substantial. Sierra Club Litigation In March 2013, the Sierra Club and MEIC filed a complaint in the U.S. District Court, District of Montana, Billings Division against Talen Montana and the other Colstrip Steam Electric Station (Colstrip) owners: Avista Corporation, Puget Sound Energy, Portland General Electric Company, NorthWestern Corporation and PacifiCorp. Talen Montana operates Colstrip on behalf of the owners. The complaint alleged certain violations of the Clean Air Act, including New Source Review, Title V and opacity requirements and listed 39 separate claims for relief. The complaint requested injunctive relief and civil penalties on average of $36,000 per day per violation, including a request that the owners remediate environmental damage and that $100,000 of the civil penalties be used for beneficial mitigation projects. In July 2013, the Sierra Club and MEIC filed an additional Notice of Intent to Sue, identifying additional plant projects that are alleged not to be in compliance with the Clean Air Act and, in September 2013, filed an amended complaint. The amended complaint dropped all claims regarding pre-2001 plant projects, as well as the plaintiffs' Title V and opacity claims. It did, however, add claims with respect to a number of post-2000 plant projects, which effectively increased the number of projects subject to the litigation by about 40 . Talen Montana and the other Colstrip owners filed a motion to dismiss the amended complaint in October 2013. In May 2014, the court dismissed the plaintiffs' independent Best Available Control Technology claims and their Prevention of Significant Deterioration (PSD) claims for three projects, but denied the owners' motion to dismiss the plaintiffs' other PSD claims on statute of limitation grounds. In August 2014, the Sierra Club and MEIC filed a second amended complaint. This complaint includes the same causes of action articulated in the first amended complaint, but in regard to only eight projects done between 2001 and 2013. In September 2014, the Colstrip owners filed an answer to the second amended complaint. Discovery closed in the first quarter of 2015, and in April, the plaintiffs indicated they intend to pursue claims related to only four of the remaining projects. The magistrate judge entered an order on the parties' motions for summary judgment on December 31, 2015. The judgment dismissed two of the plaintiffs' four remaining claims and provided more preferable legal standards for the remaining two claims. The case has been bifurcated as to liability and remedy, and the liability trial is currently set for May 2016. A trial date with respect to remedy, if there is a finding of liability, has not been scheduled. Notice of Intent to File Suit In October 2014, Talen Energy received a notice letter from the Chesapeake Bay Foundation (CBF) alleging violations of the Clean Water Act and Pennsylvania Clean Streams Law at the Brunner Island generation plant. The letter was sent to Brunner Island, LLC and the PADEP and is intended to provide notice of the alleged violations and CBF's intent to file suit in Federal court after expiration of the 60 day statutory notice period. Among other things, the letter alleges that Brunner Island, LLC failed to comply with the terms of its National Pollutant Discharge Elimination System permit and associated regulations related to the application of nutrient credits to the facility's discharges of nitrogen into the Susquehanna River. The letter also alleges that PADEP has failed to ensure that credits generated from nonpoint source pollution reduction activities that Brunner Island, LLC applies to its discharges meet the eligibility and certification requirements under PADEP's nutrient trading program regulations. If a lawsuit is filed by CBF, Talen Energy would expect CBF to seek injunctive relief, monetary penalties, fees and costs of litigation. Montana Regional Haze In September 2012, the EPA Region 8 developed a regional haze Federal Implementation Plan (FIP) for Montana. The final FIP assumed no additional controls for Corette or Colstrip Units 3 and 4, but proposed stricter limits for Corette and Colstrip Units 1 and 2. Talen Montana was meeting these stricter permit limits at Corette without any significant changes to operations, although other requirements led to the suspension of operations and retirement of Corette in March 2015. The stricter limits at Colstrip Units 1 and 2 would require additional controls to meet more stringent nitrogen oxides and sulfur dioxide limits, the cost of which could be significant. Both Talen Montana and environmental groups appealed the final FIP to the U.S. Court of Appeals for the Ninth Circuit where oral argument was heard in May 2014. On June 9, 2015, the Ninth Circuit issued a decision that vacated as arbitrary and capricious the portions of the FIP setting stricter emissions limits for Colstrip Units 1 and 2 and Corette. The Ninth Circuit upheld the EPA's decision not to require further emissions reductions at Colstrip Units 3 and 4. The Ninth Circuit opinion requires the EPA to now reissue a FIP that is consistent with the opinion. Colstrip Wastewater Facility Administrative Order on Consent Talen Montana is party to an Administrative Order on Consent (AOC) with the MDEQ related to operation of the wastewater facilities at the Colstrip power plant. In September 2012, Earthjustice, on behalf of Sierra Club, MEIC, and the National Wildlife Federation, filed an affidavit under Montana's Major Facility Siting Act (MFSA) that sought review of the AOC by Montana's Board of Environmental Review. Talen Montana elected to have this proceeding conducted in Montana state district court, and in October 2012, Earthjustice filed a petition for review in Montana state district court in Rosebud County. This matter was stayed in December 2012 pending the outcome of separate litigation where the same environmental groups challenged the AOC in a writ of mandamus. That litigation was resolved in May 2013 when defendants Talen Montana and MDEQ won their motions to dismiss the matter, and the environmental groups did not appeal. In April 2014, Earthjustice filed successful motions for leave to amend the petition for review and to lift the stay. Talen Montana and the MDEQ responded to the amended petition and filed partial motions to dismiss in July 2014, which were denied in October 2014. Discovery closed in October 2015, summary judgment motions on behalf of all parties are pending, and a bench trial is set for April 2016. Other In addition to the above matters, from time-to-time in the ordinary course of its business Talen Energy may be subject to other legal proceedings, claims and litigation. While the outcome of these legal proceedings, claims and litigation is uncertain, the likely results are not expected, either individually or in the aggregate, to have a material adverse effect on Talen Energy's financial condition or results of operations, although the effect could be material to Talen Energy's results of operations in any interim reporting period. Regulatory Matters Talen Energy is subject to regulation by federal and state agencies in the various regions where it conducts business, including with respect to the following matters. New Jersey Capacity Legislation In January 2011, New Jersey enacted a law (the Act) that Talen Energy believes would intervene in the wholesale capacity market to create incentives for the development of new, in-state electricity generation facilities even when, under the FERC-approved PJM economic model, such new generation would not be economic. The Act could have the effect of depressing capacity prices in PJM in the short term, which could impact Talen Energy's revenues, and also could harm the long-term ability of the PJM capacity market to encourage necessary generation investment throughout PJM. In February 2011, certain Talen Energy subsidiaries and several other companies filed a complaint in U.S. District Court in New Jersey challenging the Act on the grounds that it violates the Supremacy and Commerce clauses of the U.S. Constitution and requesting relief barring implementation. In October 2013, the U.S. District Court in New Jersey issued a decision finding the Act unconstitutional under the Supremacy Clause on the grounds that it infringes upon the FERC's exclusive authority to regulate the wholesale sale of electricity in interstate commerce. The decision was appealed to the U.S. Court of Appeals for the Third Circuit (Third Circuit) by CPV Power Development, Inc., Hess Newark, LLC and the State of New Jersey (the Appellants). In September 2014, the Third Circuit affirmed the District Court's decision. In December 2014, the Appellants filed a petition for certiorari before the U.S. Supreme Court. In March 2015, the U.S. Supreme Court requested the U. S. Solicitor General to submit briefs expressing its views as to the issues raised in this case. In September 2015, the U.S. Solicitor General filed a brief expressing the view of the United States that the case was rightly decided and that the petition for certiorari should be denied. Talen Energy believes, though no assurances can be given, that the proceeding may be delayed pending the outcome of the Maryland Public Service Commission (MD PSC) action described below. Based upon information currently available to it, Talen Energy cannot estimate a range of reasonably possible losses, if any, related to this matter. Maryland Capacity Order In April 2012, the MD PSC ordered (Order) three electric utilities in Maryland to enter into long-term contracts to support the construction of new electricity generating facilities in Maryland, the intent of which, Talen Energy believed, was to encourage the construction of new generation even when, under the FERC-approved PJM economic model, such new generation would not be economic. The MD PSC action could have the effect of depressing capacity prices in PJM in the short term, which could impact Talen Energy's revenues, and also could harm the long-term ability of the PJM capacity market to encourage necessary generation investment throughout PJM. In April 2012, Talen Energy subsidiaries and several other companies filed a complaint in U.S. District Court (District Court) in Maryland challenging the Order on the grounds that it violates the Supremacy and Commerce clauses of the U.S. Constitution, and requested declaratory and injunctive relief barring implementation of the Order by the MD PSC Commissioners. In September 2013, the District Court issued a decision finding the order unconstitutional under the Supremacy Clause on the grounds that it infringes upon the FERC's exclusive authority to regulate the wholesale sale of electricity in interstate commerce. The decision was appealed to the U.S. Court of Appeals for the Fourth Circuit (Fourth Circuit) by CPV Power Development, Inc. and the State of Maryland (the Appellants). In June 2014, the Fourth Circuit affirmed the District Court's opinion and subsequently denied the Appellants' motion for rehearing. In December 2014, the Appellants filed a petition for certiorari before the U.S. Supreme Court. In March 2015, the U.S. Supreme Court requested the U.S. Solicitor General to submit briefs expressing its views as to the issues raised in this case. In September 2015, the U.S. Solicitor General filed a brief expressing the view of the United States that the case was rightly decided and that the petition for certiorari should be denied. In October 2015, the U.S. Supreme Court granted certiorari of the case, and oral arguments are scheduled for February 2016. Based upon information currently available to it, Talen Energy cannot estimate a range of reasonable possible losses, if any, related to this matter. Pacific Northwest Markets Talen Energy Marketing and Talen Montana made spot market bilateral sales of power in the Pacific Northwest during the period from December 2000 through June 2001. Several parties subsequently claimed refunds at the FERC as a result of these sales. In June 2003, the FERC terminated proceedings to consider whether to order refunds for spot market bilateral sales made in the Pacific Northwest, including sales made by Talen Montana, during the period December 2000 through June 2001. In August 2007, the U.S. Court of Appeals for the Ninth Circuit reversed the FERC's decision and ordered the FERC to consider additional evidence. In October 2011, the FERC initiated proceedings to consider additional evidence. In December 2015, the United States Court of Appeals for the Ninth Circuit affirmed the FERC's October 2011 order setting out the remand process that the FERC has followed from 2011 to the present. In July 2012, Talen Montana and the City of Tacoma, one of the two parties claiming refunds at the FERC, reached a settlement whereby Talen Montana paid $75 thousand to resolve the City of Tacoma's $23 million claim. The settlement does not resolve the remaining claim outstanding by the City of Seattle for approximately $50 million . Hearings before a FERC Administrative Law Judge (ALJ) regarding the City of Seattle's refund claims were completed in October 2013 and briefing was completed in January 2014. In March 2014, the ALJ issued an initial decision denying the City of Seattle's complaint against Talen Montana. In May 2015, the FERC issued an order affirming the ALJ's March 2014 decision, and in January 2016 the FERC denied requests for a rehearing of its order affirming the ALJ's decision. In February 2016 the City of Seattle appealed the FERC's decision to the United States Court of Appeals for the Ninth Circuit. Although Talen Energy and its subsidiaries believe they have not engaged in any improper trading or marketing practices affecting the Pacific Northwest markets, Talen Energy cannot predict the outcome of the above-described proceedings or whether any subsidiaries will be the subject of any additional governmental investigations or named in other lawsuits or refund proceedings. Consequently, Talen Energy cannot estimate a range of reasonably possible losses, if any, related to this matter. Electricity - Reliability Standards The NERC is responsible for establishing and enforcing reliability standards (Reliability Standards) regarding the bulk power system. The FERC oversees this process and independently enforces the Reliability Standards. The Reliability Standards have the force and effect of law and apply to certain users of the bulk power electricity system, including electric utility companies, generators and marketers. Under the Federal Power Act, the FERC may assess civil penalties of up to $1 million per day, per violation, for certain violations. Talen Energy monitors its subsidiaries' compliance with the Reliability Standards and self-reports potential violations of certain applicable reliability requirements and submit accompanying mitigation plans, as required. The resolution of a number of potential violations is pending. In the course of implementing their programs to ensure compliance with the Reliability Standards by those Talen Energy subsidiaries subject to the standards, certain other instances of potential non-compliance may be identified from time to time. Talen Energy cannot predict the outcome of these matters, and cannot estimate a range of reasonably possible losses, if any. Other In addition to the regulatory matters discussed above, Talen Energy and its subsidiaries are party to other regulatory proceedings arising in the ordinary course of business or have other regulatory exposure. While the outcome of these other regulatory matters and proceedings is uncertain, the likely results are not expected, either individually or in the aggregate, to have a material adverse effect on Talen Energy's financial condition or results of operations, although the effect could be material to Talen Energy's results of operations in any interim reporting period. Environmental Matters Environmental Laws and Regulations Extensive federal, state and local environmental laws and regulations are applicable to Talen Energy's air emissions, water discharges and the management of hazardous and solid waste, as well as other aspects of its business. In addition, many of these environmental considerations are also applicable to the operations of key suppliers, or customers, such as coal producers and industrial power users, and may impact the cost for their products or their demand for Talen Energy's services. It may be necessary for Talen Energy to modify, curtail, replace or cease operation of certain facilities or performance of certain operations to comply with statutes, regulations and other requirements imposed by regulatory bodies, courts or environmental groups. Talen Energy may incur costs to comply with environmental laws and regulations, including increased capital expenditures or operating and maintenance expenses, monetary fines, penalties or other restrictions, which could be material. Legal challenges to environmental permits or rules add to the uncertainty of estimating the future cost of complying with these permits and rules. In addition, costs may increase significantly if the requirements or scope of environmental laws or regulations, or similar rules, are expanded or changed. Superfund and Other Remediation Under the Pennsylvania Clean Streams Law, a subsidiary of Talen Generation is obligated to remediate acid mine drainage at a former mine site and may be required to take additional steps to prevent acid mine drainage at the previously capped refuse pile at this mine site. The subsidiary is currently pumping and treating mine water at the former mine site. At December 31, 2015, Talen Generation had accrued a discounted liability of $19 million to cover the costs of pumping and treating groundwater at the remaining mine site for 50 years. Talen Energy discounted this liability based on a risk-free rate of 8.41% at the time of the mine closure. Expected undiscounted payments are estimated to be insignificant for each of the years 2016 through 2020 and $92 million for work after 2020. From time-to-time, Talen Energy undertakes investigative or remedial actions in response to notices of violations, spills or other releases at various on-site and off-site locations, negotiates with the EPA and state and local agencies regarding actions necessary for compliance with applicable requirements, negotiates with property owners and other third parties alleging impacts from Talen Energy's operations and undertakes similar actions necessary to resolve environmental matters which arise in the course of normal operations. Based on analysis to-date, resolution of these known environmental matters is not expected to have a material adverse effect on Talen Energy's financial condition or results of operations. Future investigation or remediation work at sites currently under review, or at sites not currently identified, may result in additional costs for Talen Energy, but at this time Talen Energy is unable to determine if such investigation or remediation work will have a material adverse effect on Talen Energy's financial condition or results of operations. Other In addition to the environmental matters discussed above, from time-to-time in the ordinary course of its business Talen Energy may become involved in other environmental matters or become subject to other environmental statutes, regulations or requirements. In the opinion of management, based upon information currently available to Talen Energy, while the outcome of these other environmental matters and proceedings is uncertain, the likely results are not expected, either individually or in the aggregate, to have a material adverse effect on Talen Energy's financial condition or results of operations, although the effect could be material to Talen Energy's results of operations in any interim reporting period. Other Commitments and Contingencies Nuclear Insurance The Price-Anderson Act is a United States Federal law which governs liability-related issues and ensures the availability of funds for public liability claims arising from an incident at any U.S. licensed nuclear facility. It also seeks to limit the liability of nuclear reactor owners for such claims from any single incident. At December 31, 2015 , the liability limit per incident is $13.3 billion for such claims which is funded by insurance coverage from American Nuclear Insurers and an industry assessment program. Under the industry retroactive assessment program, in the event of a nuclear incident at any of the reactors covered by The Price-Anderson Act, as amended, Susquehanna Nuclear could be assessed deferred premiums of up to $255 million per incident, payable at a maximum of $38 million per year. Additionally, Susquehanna Nuclear purchases property insurance programs from NEIL, an industry mutual insurance company of which Susquehanna Nuclear is a member. Effective April 1, 2015, facilities at the Susquehanna plant are insured against property damage losses up to $2.0 billion . Susquehanna Nuclear also purchases an insurance program that provides coverage for the cost of replacement power during prolonged outages of nuclear units caused by certain specified conditions. Under the NEIL property and replacement power insurance programs, Susquehanna Nuclear could be assessed retrospective premiums in the event of the insurers' adverse loss experience. This maximum assessment is $55 million . Talen Energy has additional coverage that, under certain conditions, may reduce this exposure. Labor Union Agreements In May 2014, Talen Energy's bargaining agreement with its largest IBEW local expired. Talen Energy finalized a new three -year labor agreement with IBEW local 1600 in May 2014 and the agreement was ratified in early June 2014. As part of efforts to reduce operations and maintenance expenses, the new agreement offered a one-time voluntary retirement window to certain bargaining unit employees. The benefits offered under this provision are consistent with the standard separation program benefits for bargaining unit employees. In 2014, the following charges for separation benefits were recorded. Pension Benefits $ 11 Severance Compensation 6 Total Separation Benefits $ 17 Number of Employees 105 The separation benefits are included in "Operation and maintenance" on the Statement of Income. The liability for pension benefits is included in "Accrued pension obligations" on the Balance Sheets. All of the severance compensation was paid in 2014. Guarantees and Other Assurances In the normal course of business, Talen Energy enters into agreements that provide financial performance assurance to third parties on behalf of certain subsidiaries. Such agreements include, for example, guarantees, stand-by letters of credit issued by financial institutions and surety bonds issued by insurance companies. These agreements are entered into primarily to support or enhance the creditworthiness attributed to a subsidiary on a stand-alone basis or to facilitate the commercial activities in which these subsidiaries engage. The table below details guarantees provided as of December 31, 2015 . "Exposure" represents the estimated maximum potential amount of future payments that could be required to be made under the guarantee. The probability of expected payment/performance for the guarantees described below is remote. There was no recorded liability at December 31, 2015 . The recorded liability at December 31, 2014 was $13 million . Talen Energy Supply has indemnifications related to sales of assets that are governed by the specific sales agreement and include breach of the representations, warranties and covenants, and liabilities for certain other matters. Talen Energy's maximum exposure with respect to certain indemnifications and the expiration of the indemnifications cannot be estimated because the maximum potential liability is not capped by the transaction documents and the expiration date is based on the applicable statute of limitations. The exposure and expiration date noted is based on those cases in which the agreements provide for specific limits. The exposure at December 31, 2015 includes amounts related to the sale of the Talen Montana hydroelectric facilities. See Note 6 for additional information related to the sale. Talen Energy's exposure and related expiration dates are: December 31, 2015 Expiration Date Indemnifications for sales of assets $ 1,150 2016 - 2025 In connection with the acquisition of RJS Power and the spinoff from PPL, Talen Energy Supply agreed to indemnify PPL and its affiliates following the spinoff for liabilities primarily relating to the Talen Energy Supply business prior to the spinoff, as well as for losses arising out of breaches of Talen Energy's failure to perform covenants and agreements in the transaction agreements following the spinoff or arising out of breaches by the Riverstone Holders of certain representations and warranties in the transaction agreements. Talen Energy Supply also agreed to indemnify PPL for liabilities relating to the employment or termination of service of PPL employees who primarily supported the Talen Energy Supply business prior to the spinoff (excluding however defined benefit pension obligations of PPL employees who terminated service prior to July 1, 2000 or who were not employed by Talen Energy Supply or its subsidiaries at the time of termination). Talen Energy Supply also agreed to indemnify PPL from tax liabilities resulting from actions by Talen Energy following the closing resulting in the transaction failing to qualify for its intended tax-free treatment. Talen Energy and/or its subsidiaries provide other miscellaneous guarantees through contracts entered into in the normal course of business. These guarantees are primarily in the form of indemnification or warranties related to services or equipment and vary in duration. The amounts of these guarantees often are not explicitly stated, and the overall maximum amount of the obligation under such guarantees cannot be reasonably estimated. Historically, no significant payments have been made with respect to these types of guarantees and the probability of payment/performance under these guarantees is remote. Talen Energy, on behalf of itself and certain of its subsidiaries, maintains insurance that covers liability assumed under contract for bodily injury and property damage. The coverage provides maximum aggregate coverage of $100 million . This insurance may be applicable to obligations under certain of these contractual arrangements. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Prior to the spinoff, PPL Electric and PPL Services were affiliates of Talen Energy. The disclosures below provide information regarding transactions that occurred prior to June 1, 2015. After June 1, 2015, transactions with PPL Electric and PPL Services, or any other PPL subsidiaries are not related party transactions. PLR Contracts/Sales of Accounts Receivable PPL Electric holds competitive solicitations for PLR generation supply. Talen Energy Marketing has been awarded a portion of the PLR generation supply through these competitive solicitations. The sales between Talen Energy Marketing and PPL Electric for the five months ended May 31, 2015 and the years ended December 31, 2014 and 2013 are included in the Statements of Income as "Wholesale energy to affiliate" by Talen Energy. PPL Electric's customers may choose an alternative supplier for their generation supply. As part of a PUC-approved purchase of accounts receivable program, PPL Electric purchases certain accounts receivable from alternative electricity suppliers (including Talen Energy Marketing) at a discount. During the five month period up to the spinoff included in the year ended December 31, 2015, Talen Energy Marketing sold accounts receivable to PPL Electric of $146 million , $336 million for the year ended December 31, 2014 and $ 294 million for the year ended December 31, 2013. Losses resulting from the sales of accounts receivable to PPL Electric during these periods were not material. Support Costs Prior to the spinoff, Talen Energy was provided with administrative, management and support services, primarily from PPL Services. Where applicable, the costs of these services were charged to Talen Energy Supply as direct support costs. General costs that could not be directly attributed to a specific affiliate were allocated and charged to the respective affiliates, including Talen Energy Supply, as indirect support costs. PPL Services used a three-factor methodology that includes the affiliates invested capital, operation and maintenance expenses and number of employees to allocate indirect costs, which methodology Talen Energy believes was reasonable. Talen Energy Supply was charged, primarily by PPL Services, the following amounts for the years ended December 31, including amounts applied to accounts that are further distributed between capital and expense. 2015 2014 2013 $ 67 $ 218 218 Transition Services Agreement As part of the spinoff transaction, Talen Energy Supply entered into a TSA with Topaz Power Management, LP (an affiliate of Riverstone) for certain business administrative services. For the year ended December 31, 2015 , these costs which are recorded in "Operation and maintenance" on the Statement of Income, were $6 million . Gas Supply Contract A subsidiary of Jade has a gas supply contract in place with TrailStone NA Logistics LLC (TrailStone), an affiliate of Riverstone, under which TrailStone supplies gas to the generation facilities owned by Jade. For the year ended December 31, 2015 , Talen Energy incurred $52 million of costs for these gas purchases, which are primarily recorded in "Fuel" on the Statement of Income. Other See Note 1 , for discussions regarding intercompany allocations associated with income taxes and stock-based compensation, and Note 9 for discussion regarding intercompany allocations associated with defined benefits. |
Other Income (Expense) - net
Other Income (Expense) - net | 12 Months Ended |
Dec. 31, 2015 | |
Other Nonoperating Income (Expense) [Abstract] | |
Other Income (Expense) - net | Other Income (Expense) - net Talen Energy's "Other Income (Expense) - net" for the year ended December 31, 2015 was primarily related to a charge for a termination payment to a remarketing dealer in conjunction with an October 2015 redemption of debt. See Note 5 for additional information on the redemption. For the years ended December 31, 2014 and 2013 , the activity was primarily related to the earnings on securities in NDT funds. |
Fair Value Measurements and Cre
Fair Value Measurements and Credit Concentration | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Credit Concentration | Fair Value Measurements and Credit Concentration Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). A market approach (generally, data from market transactions), an income approach (generally, present value techniques and option-pricing models), and/or a cost approach (generally, replacement cost) are used to measure the fair value of an asset or liability, as appropriate. These valuation approaches incorporate inputs such as observable, independent market data and/or unobservable data that management believes are predicated on the assumptions market participants would use to price an asset or liability. These inputs may incorporate, as applicable, certain risks such as nonperformance risk, which includes credit risk. The fair value of a group of financial assets and liabilities is measured on a net basis. Transfers between levels are recognized at end-of-reporting-period values. During 2015 and 2014 , there were no transfers between Level 1 and Level 2. See Note 1 for information on the levels in the fair value hierarchy. Recurring Fair Value Measurements The assets and liabilities measured at fair value were: December 31, 2015 December 31, 2014 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 141 $ 141 $ — $ — $ 352 $ 352 $ — $ — Restricted cash and cash equivalents (a) 106 106 — — 193 193 — — Price risk management assets: Energy commodities 693 — 597 96 1,318 6 1,171 141 Total price risk management assets 693 — 597 96 1,318 6 1,171 141 NDT funds: Cash and cash equivalents 11 11 — — 19 19 — — Equity securities U.S. large-cap 616 457 159 — 611 454 157 — U.S. mid/small-cap 87 37 50 — 89 37 52 — Debt securities U.S. Treasury 98 98 — — 99 99 — — U.S. government sponsored agency 6 — 6 — 9 — 9 — Municipality 83 — 83 — 76 — 76 — Investment-grade corporate 47 — 47 — 42 — 42 — Other 3 — 3 — 3 — 3 — Receivables (payables), net — (2 ) 2 — 2 — 2 — Total NDT funds 951 601 350 — 950 609 341 — Auction rate securities (b) 6 — — 6 8 — — 8 Total assets $ 1,897 $ 848 $ 947 $ 102 $ 2,821 $ 1,160 $ 1,512 $ 149 Liabilities Price risk management liabilities: Energy commodities $ 539 $ — $ 497 $ 42 $ 1,217 $ 5 $ 1,182 $ 30 Total price risk management liabilities $ 539 $ — $ 497 $ 42 $ 1,217 $ 5 $ 1,182 $ 30 (a) Current portion is included in "Restricted cash and cash equivalents" and long-term portion is included in "Other noncurrent assets" on the Balance Sheets. (b) Included in "Other investments" on the Balance Sheets. A reconciliation of net assets and liabilities classified as Level 3 for the years ended December 31, is as follows: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) 2015 2014 Energy Commodities, net Auction Rate Securities Total Energy Commodities, net Auction Rate Securities Total Balance at beginning of period $ 111 $ 8 $ 119 $ 24 $ 16 $ 40 Total realized/unrealized gains (losses) Included in earnings (91 ) — (91 ) (32 ) — (32 ) Included in OCI — — — — 1 1 Purchases (a) (39 ) — (39 ) (6 ) — (6 ) Sales 65 (2 ) 63 67 (9 ) 58 Settlements (24 ) — (24 ) 50 — 50 Transfers into Level 3 19 — 19 7 — 7 Transfers out of Level 3 13 — 13 1 — 1 Balance at end of period $ 54 $ 6 $ 60 $ 111 $ 8 $ 119 (a) 2015 includes positions acquired through the acquisition of RJS Power. The significant unobservable inputs used in and quantitative information about the fair value measurement of assets and liabilities classified as Level 3 are as follows: December 31, 2015 Talen Energy Fair Value, net Asset (Liability) Valuation Technique Significant Unobservable Input(s) Range (Weighted Average) (a) Energy commodities Natural gas contracts (b) $ 55 Discounted cash flow Proprietary model used to calculate forward prices 10% - 100% (50%) Power sales contracts (c) 13 Discounted cash flow Proprietary model used to calculate forward prices 10% - 100% (100%) FTR purchase contracts (d) (2 ) Discounted cash flow Historical settled prices used to model forward prices 100% (100%) Heat rate call options (e) (10 ) Discounted cash flow Proprietary model used to calculate forward prices 100% (100%) CRR purchase contracts (g) (2 ) Discounted cash flow Proprietary model used to calculate forward prices 100% (100%) Auction rate securities (f) 6 Discounted cash flow Modeled from SIFMA Index 46% - 47% (46.5%) December 31, 2014 Talen Energy Fair Value, net Asset (Liability) Valuation Technique Significant Unobservable Range (Weighted Average) (a) Energy commodities Natural gas contracts (b) $ 59 Discounted cash flow Proprietary model used to calculate forward prices 11% - 100% (52%) Power sales contracts (c) (1 ) Discounted cash flow Proprietary model used to calculate forward prices 10% - 100% (59%) FTR purchase contracts (d) 3 Discounted cash flow Historical settled prices used to model forward prices 100% (100%) Heat rate call options (e) 50 Discounted cash flow Proprietary model used to calculate forward prices 23% - 51% (45%) Auction rate securities (f) 8 Discounted cash flow Modeled from SIFMA Index 51% - 69% (63%) (a) The range and weighted average represent the percentage of fair value derived from the unobservable inputs. (b) As the forward price of natural gas increases/(decreases), the fair value of purchase contracts increases/(decreases). As the forward price of natural gas increases/(decreases), the fair value of sales contracts (decreases)/increases. (c) As forward market prices increase/(decrease), the fair value of contracts (decreases)/increases. As volumetric assumptions for contracts in a gain position increase/(decrease), the fair value of contracts increases/(decreases). As volumetric assumptions for contracts in a loss position increase/(decrease), the fair value of the contracts (decreases)/increases. (d) As the forward implied spread increases/(decreases), the fair value of the contracts increases/(decreases). (e) The proprietary model used to calculate fair value incorporates market heat rates, correlations and volatilities. As the market implied heat rate increases/(decreases), the fair value of purchased calls increases/(decreases). As the market implied heat rate increases/(decreases), the fair value of sold calls (decreases)/increases. (f) The model used to calculate fair value incorporates an assumption that the auctions will continue to fail. As the modeled forward rates of the SIFMA Index increase/(decrease), the fair value of the securities increases/(decreases). (g) As the forward implied spread increases/(decreases), the fair value of the contracts increases/(decreases). Net gains and losses on assets and liabilities classified as Level 3 and included in earnings for the years ended December 31 are reported in the Statements of Income as follows: Energy Commodities, net Wholesale Energy Retail Energy Energy Purchases 2015 2014 2015 2014 2015 2014 Total gains (losses) included in earnings $ (80 ) $ (77 ) $ (2 ) $ 23 $ (9 ) $ 22 Change in unrealized gains (losses) relating (7 ) 50 29 37 (6 ) (4 ) Price Risk Management Assets/Liabilities - Energy Commodities Energy commodity contracts are generally valued using the income approach, except for exchange-traded derivative contracts, which are valued using the market approach and are classified as Level 1. Level 2 contracts are valued using inputs which may include quotes obtained from an exchange (where there is insufficient market liquidity to warrant inclusion in Level 1), binding and non-binding broker quotes, prices posted by ISOs or published tariff rates. Furthermore, independent quotes are obtained from the market to validate the forward price curves. Energy commodity contracts include forwards, futures, swaps, options and structured transactions and may be offset with similar positions in exchange-traded markets. To the extent possible, fair value measurements utilize various inputs that include quoted prices for similar contracts or market-corroborated inputs. In certain instances, these contracts may be valued using models, including standard option valuation models and other standard industry models. When the lowest level inputs that are significant to the fair value measurement of a contract are observable, the contract is classified as Level 2. When unobservable inputs are significant to the fair value measurement, a contract is classified as Level 3. Level 3 contracts are valued using Talen Energy's proprietary models which may include significant unobservable inputs such as delivery at a location where pricing is unobservable, delivery dates that are beyond the dates for which independent quotes are available, volumetric assumptions, implied volatilities, implied correlations, and market implied heat rates. Forward transactions, including forward transactions classified as Level 3, are analyzed by Talen Energy's Risk Management department. Accounting personnel interpret the analysis quarterly to appropriately classify the fair value measurements in the fair value hierarchy. Valuation techniques are evaluated periodically. Additionally, Level 2 and Level 3 fair value measurements include adjustments for credit risk based on Talen Energy's own creditworthiness (for net liabilities) and its counterparties' creditworthiness (for net assets). Talen Energy's credit department assesses all reasonably available market information which is used by accounting personnel to calculate the credit valuation adjustment. In certain instances, energy commodity contracts are transferred between Level 2 and Level 3. The primary reasons for the transfers during 2015 were changes in the availability of market information and changes in the significance of the unobservable inputs utilized in the valuation of the contracts. NDT Funds The market approach is used to measure the fair value of equity securities held in the NDT funds. • The fair value measurements of equity securities classified as Level 1 are based on quoted prices in active markets. • The fair value measurements of investments in commingled equity funds are classified as Level 2. These fair value measurements are based on firm quotes of net asset values per share, which are not obtained from a quoted price in an active market. The fair value of debt securities is generally measured using a market approach, including the use of pricing models which incorporate observable inputs. Common inputs include benchmark yields, relevant trade data, broker/dealer bid/ask prices, benchmark securities and credit valuation adjustments. When necessary, the fair value of debt securities is measured using the income approach, which incorporates similar observable inputs as well as payment data, future predicted cash flows, collateral performance and new issue data. Auction Rate Securities The fair value of auction rate securities is estimated using an income approach that includes readily observable inputs, such as principal payments and discount curves for bonds with credit ratings and maturities similar to the securities, and unobservable inputs, such as future interest rates that are estimated based on the SIFMA Index, creditworthiness, and liquidity assumptions driven by the impact of auction failures. The probability of realizing losses on these securities is not significant. When the present value of future interest payments is significant to the overall valuation, the auction rate securities are classified as Level 3. Auction rate securities are valued by the Treasury department. Accounting personnel interpret the analysis quarterly to classify the fair value measurements in the fair value hierarchy. Valuation techniques are evaluated periodically. Nonrecurring Fair Value Measurements The following nonrecurring fair value measurements occurred during the reporting periods, resulting in impairments: Carrying Fair Value Measurements Pre-tax Loss (c) Sapphire plants (November 30, 2015) $ 270 $ 204 $ 66 Sapphire plants and C.P. Crane plant (September 30, 2015) 388 266 122 Kerr Dam Project (March 31, 2014) (d) 47 29 18 Corette plant and emission allowances (December 31, 2013) 65 — 65 (a) Represents carrying value before fair value measurement. (b) For the Sapphire plants, also reflects estimated cost to sell at September 30, 2015. (c) The impairment on the Kerr Dam Project is included in "Income (Loss) from Discontinued Operations (net of income taxes)" on the Statement of Income. The impairments on the C.P. Crane plant and the Sapphire plants are included in "Impairments" on the Statement of Income. (d) The Kerr Dam Project was included in the sale of the Talen Montana hydroelectric facilities and the assets were removed from the Balance Sheet. See Note 6 for additional information. The significant unobservable inputs used in and the quantitative information about the nonrecurring fair value measurement of assets and liabilities classified as Level 3 are as follows: Fair Value, net Valuation Significant Range Sapphire plants (November 30, 2015) $ 204 Discounted cash flow Proprietary model used to calculate plant value 100% (100%) Sapphire plants and C.P. Crane plant (September 30, 2015) 266 Discounted cash flow Proprietary model used to calculate plant value 100% (100%) Kerr Dam Project (March 31, 2014) 29 Discounted cash flow Proprietary model used to calculate plant value 38% (38%) Corette plant and emission allowances (December 31, 2013) — Discounted cash flow Long-term forward prices and a proprietary model used to calculate plant value 100% (100%) (a) The range and weighted average represent the percentage of fair value derived from the unobservable inputs. Sapphire Plants and C.P. Crane Plant In the third quarter of 2015, Talen Energy updated its fundamental pricing models in conjunction with market information gained as a result of the 2018/2019 planning year PJM capacity auction completed in August 2015. As a result, Talen Energy assessed certain long-lived assets for impairment and determined that the C.P. Crane coal-fired plant failed a recoverability test and as a result, recorded an impairment charge based on the plant's estimated fair value at September 30, 2015. Additionally, because the Sapphire plants were classified as held for sale and had to be carried at the lower of their current carrying value or fair value less cost to sell, Talen Energy used updated cash flow information to calculate the estimated fair value of the Sapphire plants at September 30, 2015 and determined a write-down was necessary at that time based on estimated fair value. The Sapphire plants were reclassified from held for sale to held and used as of November 30, 2015 and updated cash flow information was used to calculate the estimated fair value on that date of reclassification to held and used and an additional write-down was necessary at that time based on the updated estimated fair value. To estimate the fair value of the Sapphire plants and C.P. Crane plant, Talen Energy performed an internal analysis primarily using an income approach based on discounted cash flows (a proprietary Talen Energy model) to assess the fair value of these assets. Assumptions used in the Talen Energy proprietary model were the forward energy and capacity price curves, forecasted generation, and forecasted operation, maintenance and capital expenditures and a market participant discount rate. Through this analysis, Talen Energy determined the fair value of the C.P. Crane plant at September 30, 2015 and the Sapphire plants at September 30 and November 30, 2015. See Note 1 for additional information on the initial assets held for sale classification and subsequent reclassification to assets held and used for the Sapphire plants and Note 6 for additional information on the sale of the C.P. Crane plant. The assets were valued by Talen Energy's financial planning and analysis personnel and accounting personnel interpreted the analysis to appropriately classify the fair value measurements in the fair value hierarchy. Kerr Dam Project Talen Montana previously held a joint operating license issued for the Kerr Dam Project. The license extends until 2035 and, between 2015 and 2025, the Confederated Salish and Kootenai Tribes of the Flathead Nation (the Tribes) have the option to purchase, hold and operate the Kerr Dam Project. The parties submitted the issue of the appropriate amount of the conveyance price to arbitration in February 2013. In March 2014, the arbitration panel issued its final decision holding that the conveyance price payable by the Tribes to Talen Montana was $18 million . As a result of the decision, Talen Energy performed a recoverability test on the Kerr Dam Project and recorded an impairment charge. Talen Energy performed an internal analysis using an income approach based on discounted cash flows (a proprietary Talen Energy model) to assess the fair value of the Kerr Dam Project. Assumptions used in the Talen Energy proprietary model were the conveyance price, forward energy price curves, forecasted generation, and forecasted operation and maintenance expenditures that were consistent with assumptions used in the business planning process and a market participant discount rate. Through this analysis, Talen Energy determined the estimated fair value of the Kerr Dam Project at March 31, 2014. The Kerr Dam Project was included in the November 2014 sale of the Talen Montana hydroelectric facilities. See Note 6 for additional information on the sale of the Talen Montana hydroelectric facilities. The assets were valued by the Talen Energy Financial Department. Accounting personnel interpreted the analysis to appropriately classify the assets in the fair value hierarchy. Corette Plant and Emission Allowances During the fourth quarter 2013, Talen Montana recorded an impairment loss on the Corette plant and related emission allowances. In connection with the completion of its 2013 annual business planning process that included revised long-term power and gas price assumptions and other factors, Talen Energy altered its expectations regarding the probability that the Corette plant would operate subsequent to initially placing it in long-term reserve status and determined the carrying amount for Corette was no longer recoverable. As a result, Talen Energy performed an internal analysis using an income approach based on discounted cash flows (a proprietary Talen Energy model) to assess the fair value of the Corette asset group. Assumptions used in the fair value assessment were forward energy prices, expectations for demand for energy in Corette's market and expected operation and maintenance and capital expenditures that were consistent with assumptions used in the business planning process and a market participant discount rate. Through this analysis, Talen Energy determined the fair value of the asset group to be negligible. Operations were suspended and the Corette plant was retired in the first quarter of 2015. The assets were valued by the Talen Energy Financial Department. Accounting personnel interpreted the analysis to appropriately classify the assets in the fair value hierarchy. Financial Instruments Not Recorded at Fair Value The carrying amounts of long-term debt on the Balance Sheets and its estimated fair values are set forth below. The fair value was primarily estimated using an income approach by discounting future cash flows at estimated current cost of funding rates, which incorporates the credit risk of Talen Energy Supply. Long-term debt is classified as Level 2. December 31, 2015 December 31, 2014 Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt $ 4,203 $ 3,343 $ 2,218 $ 2,204 The carrying value of short-term debt, when outstanding, and MACH Gen's Term Loan B approximates fair value due to the variable interest rates associated with the debt and is classified as Level 2. Credit Concentration Associated with Financial Instruments Contracts are entered into with many entities for the purchase and sale of energy. When NPNS is elected, the fair value of these contracts is not reflected in the financial statements. However, the fair value of these contracts is considered when committing to new business from a credit perspective. See Note 15 for information on credit procedures used to manage credit risk, including master netting arrangements and collateral requirements. At December 31, 2015 , Talen Energy had credit exposure of $574 million from energy trading partners, excluding the effects of netting arrangements, reserves and collateral. As a result of netting arrangements, reserves and collateral, Talen Energy's credit exposure was reduced to $368 million . The top ten counterparties, including their affiliates, accounted for $173 million , or 47% , of these exposures. Nine of these counterparties had an investment grade credit rating from S&P or Moody's and accounted for 90% of the top ten exposures. The remaining counterparty has not been rated by S&P or Moody's, but is current on its obligations. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Risk Management Objectives Talen Energy has a risk management policy approved by the Talen Energy Corporation Board of Directors to manage market risk associated with commodities, interest rates on debt issuances and foreign exchange (including price, liquidity and volumetric risk) and credit risk (including non-performance risk and payment default risk). A risk management committee, comprised of senior management and chaired by the Director-Risk Management, oversees the risk management function. Key risk control activities designed to ensure compliance with the risk policy include, but are not limited to, credit review and approval, validation of transactions and market prices, verification of risk and transaction limits, VaR analysis, portfolio stress tests, cash flow at risk analysis, sensitivity analysis and daily portfolio reporting. Market Risk Market risk includes the potential loss that may be incurred as a result of price changes associated with a particular financial or commodity instrument as well as market liquidity and volumetric risks. Forward and futures contracts, options, swaps and structured transactions are utilized as part of risk management strategies to minimize unanticipated fluctuations in earnings caused by changes in commodity prices, volumes of full-requirement sales contracts, basis exposure and interest rates. Many of the contracts meet the definition of a derivative. All derivatives are recognized on the Balance Sheets at their fair value, unless NPNS is elected. Talen Energy is subject to market risks, which are actively mitigated through the risk management policy described above. Such risks include: • Commodity price risk, including basis and volumetric risk • Interest rate risk Commodity price risk • Talen Energy is exposed to commodity price risk for energy and energy-related products associated with the sale of electricity from its generating assets and other electricity and gas marketing activities and the purchase of fuel and fuel-related commodities for generating assets, as well as for proprietary trading activities. Interest rate risk • Talen Energy is exposed to interest rate risk associated with forecasted fixed-rate and existing floating-rate debt issuances. Credit Risk Credit risk is the potential loss that may be incurred due to a counterparty's non-performance. Talen Energy is exposed to credit risk from "in-the-money" commodity derivatives with its energy trading partners, which include other energy companies, fuel suppliers, financial institutions and other wholesale and retail customers. The majority of Talen Energy's credit risk stems from commodity derivatives for multi-year contracts for energy sales and purchases. If Talen Energy's counterparties fail to perform their obligations under such contracts and Talen Energy could not replace the sales or purchases at the same or better prices as those under the defaulted contracts, Talen Energy would incur financial losses. Those losses would be recognized immediately or through lower revenues or higher costs in future years, depending on the accounting treatment for the defaulted contracts. Talen Energy has credit procedures in place to manage credit risk, including the use of an established credit approval process, daily monitoring of counterparty positions and the use of master netting agreements or provisions. These agreements generally include credit mitigation provisions, such as margin, prepayment or collateral requirements. Talen Energy may request additional credit assurance, in certain circumstances, in the event that the counterparties' credit ratings fall below investment grade or their exposures exceed an established credit limit. See Note 14 for credit concentration associated with energy trading partners. Master Netting Arrangements Net derivative positions on the balance sheets are not offset against the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) under master netting arrangements. Talen Energy did not have any obligation to return counterparty cash collateral under master netting arrangements at December 31, 2015 and had an $ 11 million obligation at December 31, 2014 . Talen Energy did not post any cash collateral under master netting arrangements at December 31, 2015 and 2014 . See "Offsetting Derivative Investments" below for a summary of derivative positions presented in the balance sheets where a right of setoff exists under these arrangements. Commodity Price Risk (Non-trading) Commodity price risk, including basis and volumetric risk, is among Talen Energy's most significant risks due to the level of investment that Talen Energy maintains in its competitive generation assets. Several factors influence price levels and volatilities. These factors include, but are not limited to, seasonal changes in demand, weather conditions, available generating assets within regions, transportation/transmission availability and reliability within and between regions, market liquidity, and the nature and extent of current and potential federal and state regulations. Talen Energy has a formal hedging program to economically hedge the forecasted purchase and sale of electricity and related fuels for its competitive generation fleet, which has a generation capacity of 17,379 MW (summer rating). Talen Energy's portfolio also includes full-requirement sales contracts and related supply contracts and retail natural gas and electricity sale contracts. The strategies that Talen Energy uses to hedge its full-requirement sales contracts include supplying the energy, capacity and RECs from its generation assets and purchasing energy (at a liquid trading hub or directly at the load delivery zone), capacity and RECs in the market. Talen Energy enters into financial and physical derivative contracts, including forwards, futures, swaps and options, to hedge the price risk associated with electricity, natural gas, oil and other commodities. Certain contracts are non-derivatives or NPNS is elected and therefore they are not reflected in the financial statements until delivery. Talen Energy segregates its non-trading activities into two categories: cash flow hedges and economic activity as discussed below. Cash Flow Hedges Certain derivative contracts have qualified for hedge accounting so that the effective portion of a derivative's gain or loss is deferred in AOCI and reclassified into earnings when the forecasted transaction occurs. In 2015 and 2014, there were no active cash flow hedges and there was no hedge ineffectiveness associated with energy derivatives. At December 31, 2015 , the accumulated net unrecognized after-tax gains (losses) that are expected to be reclassified into earnings during the next 12 months were $12 million . Cash flow hedges are discontinued if it is no longer probable that the original forecasted transaction will occur by the end of the originally specified time periods and any amounts previously recorded in AOCI are reclassified into earnings once it is determined that the hedge transaction is probable of not occurring. There were no such reclassifications for 2015 , 2014 and 2013 . Economic Activity Many derivative contracts economically hedge the commodity price risk associated with electricity, natural gas, oil and other commodities but do not receive hedge accounting treatment because they were not eligible for hedge accounting or because hedge accounting was not elected. These derivatives hedge a portion of the economic value of Talen Energy's competitive generation assets and competitive full-requirement and retail contracts, which are subject to changes in fair value due to market price volatility and volume expectations. The derivative contracts in this category that existed at December 31, 2015 range in maturity through 2020 . Examples of economic activity may include hedges on sales of nuclear, coal and hydroelectric generation, certain purchase contracts used to supply full-requirement sales contracts, FTRs, CRRs, or basis swaps used to hedge basis risk associated with the sale of competitive generation or supplying full-requirement sales contracts, Spark Spread hedging contracts, retail electric and natural gas activities, and fuel oil swaps used to hedge price escalation clauses in coal transportation and other fuel-related contracts. Talen Energy also uses options, which include the sale of call options and the purchase of put options tied to a particular generating unit. Since the physical generating capacity is owned, price exposure is generally capped at the price at which the generating unit would be dispatched and therefore does not expose Talen Energy to uncovered market price risk. The unrealized gains (losses) for economic activity for the years ended December 31 were as follows. 2015 2014 2013 Operating Revenues Wholesale energy (a) $ 115 $ 72 $ (267 ) Retail energy (9 ) 29 12 Operating Expenses Fuel 15 (27 ) (4 ) Energy purchases (a) 60 (74 ) 132 (a) In the third quarter of 2015, Talen Energy refined an input used in its valuation technique for certain PJM basis curves as observable inputs became available. This change resulted in the recording of a $30 million net unrealized gain, primarily reflected in "Wholesale energy" revenue on the Statement of Income. Commodity Price Risk (Trading) Talen Energy has a proprietary trading strategy which is utilized to take advantage of market opportunities primarily in its geographic footprint. As a result, Talen Energy may at times create a net open position in its portfolio that could result in losses if prices do not move in the manner or direction anticipated. Net energy trading margins, which are included in "Wholesale energy" on the Statements of Income, were $75 million in 2014 and insignificant for 2015 and 2013 . Commodity Volumes At December 31, 2015 , the net volumes of derivative (sales)/purchase contracts used in support of the various strategies discussed above were as follows. Volumes (a) Commodity Unit of Measure 2016 2017 2018 Thereafter Power MWh (36,420,569 ) (4,474,975 ) (568,082 ) (334,101 ) Capacity MW-Month (5,953 ) 6 3 — Gas MMBtu 146,474,333 17,898,993 14,987,372 3,063,441 FTRs MW-Month 8,724 200 — — Oil Barrels 65,559 — — — CRRs MWh 2,491,444 538,584 — — Emission Allowances Tons 75,617 — — — (a) Volumes for option contracts factor in the probability of an option being exercised and may be less than the notional amount of the option. Accounting and Reporting All derivative instruments are recorded at fair value on the Balance Sheet as an asset or liability unless NPNS is elected. NPNS contracts for Talen Energy include certain full-requirement sales contracts, other physical purchase and sales contracts and certain retail energy and physical capacity contracts. Changes in the fair value of derivatives not designated as NPNS are recognized currently in earnings. Talen Energy has many physical and financial commodity purchases and sales contracts that economically hedge commodity price risk. Certain of the economic hedging strategies employed by Talen Energy utilize a combination of financial purchases and sales contracts. Realized and unrealized gains (losses) on these contracts are recorded currently in earnings. Generally each contract is considered a unit of account and Talen Energy presents gains (losses) on physical and financial commodity contracts based upon their economic hedging strategy. Generation revenue hedge strategies are recorded in "Wholesale energy" on the Statements of Income. Retail sales strategies are recorded in "Retail energy" on the Statements of Income. Gas, oil and coal generation supply strategies are recorded in "Fuel" on the Statements of Income. Non-generation power and fuel supply strategies are recorded in "Energy purchases" on the Statements of Income. Certain Talen Energy subsidiaries participate in RTOs and ISOs. Talen Energy accounts for these transactions on a net hourly basis because the transactions are settled on a net hourly basis. Talen Energy records realized hourly net sales or purchases of physical power with RTOs and ISOs in its Statements of Income as "Wholesale energy" if in a net sales position and "Energy purchases" if in a net purchase position. See Note 1 for information on accounting policies related to derivative instruments. The following table presents the fair value and location of commodity derivative instruments not designated as hedging instruments recorded on the Balance Sheets. December 31, 2015 December 31, 2014 Assets Liabilities Assets Liabilities Current: Price Risk Management Assets/Liabilities: $ 562 $ 431 $ 1,079 $ 1,024 Noncurrent: Price Risk Management Assets/Liabilities: 131 108 239 193 Total derivatives $ 693 $ 539 $ 1,318 $ 1,217 The following tables present the pre-tax effect of derivative instruments recognized in income. Gain (Loss) Reclassified from AOCI into Income (Effective Portion) Derivative Relationships Location of Gain (Loss) Recognized in Income on Derivative 2015 2014 2013 Cash Flow Hedges: Commodity contracts Wholesale energy $ (3 ) $ 1 $ 240 Energy purchases 33 31 (58 ) Depreciation 1 2 2 Discontinued operations — 8 23 Total $ 31 $ 42 $ 207 Derivatives Not Designated as Hedging Instruments Location of Gain (Loss) Recognized in Income on Derivative 2015 2014 2013 Commodity contracts Wholesale energy $ 742 $ (505 ) $ (9 ) Retail energy 22 30 25 Fuel (6 ) (30 ) 2 Energy purchases (452 ) 165 40 Discontinued operations — 6 14 Total $ 306 $ (334 ) $ 72 Offsetting Derivative Instruments Certain subsidiaries of Talen Energy have master netting arrangements or similar agreements in place including derivative clearing agreements with futures commission merchants (FCMs) to permit the trading of cleared derivative products on one or more futures exchanges. The clearing arrangements permit a FCM to use and apply any property in its possession as a setoff to pay amounts or discharge obligations owed by a customer upon default of the customer and typically do not place any restrictions on the FCM's use of collateral posted by the customer. Certain subsidiaries of Talen Energy also enter into agreements pursuant to which they trade certain energy and other products. Under the agreements, upon termination of the agreement as a result of a default or other termination event, the non-defaulting party typically would have a right to offset amounts owed under the agreement against any other obligations arising between the two parties (whether under the agreement or not), whether matured or contingent and irrespective of the currency, place of payment or place of booking of the obligation. Talen Energy has elected not to offset derivative assets and liabilities and not to offset net derivative positions against the right to reclaim cash collateral pledged (an asset) or the obligation to return cash collateral received (a liability) under derivatives agreements. The table below summarizes the energy commodities derivative positions presented in the balance sheets where a right of setoff exists under these arrangements and related cash collateral received or pledged. Assets Liabilities Eligible for Offset Eligible for Offset Gross Derivative Instruments Cash Collateral Received Net Gross Derivative Instruments Cash Collateral Pledged Net December 31, 2015 $ 693 $ 437 $ 74 $ 182 $ 539 $ 437 $ 30 $ 72 December 31, 2014 $ 1,318 $ 1,060 $ 10 $ 248 $ 1,217 $ 1,060 $ 58 $ 99 Credit Risk-Related Contingent Features Certain derivative contracts contain credit risk-related contingent features which, when in a net liability position, would permit the counterparties to require the transfer of additional collateral upon a decrease in the credit ratings of Talen Energy. Most of these features would require the transfer of additional collateral or permit the counterparty to terminate the contract if the applicable credit rating were to fall below investment grade. Some of these features also would allow the counterparty to require additional collateral upon each downgrade in the credit rating at levels that remain above investment grade. In either case, if the credit rating were to fall below investment grade, most of these credit contingent features require either immediate payment of the net liability as a termination payment or immediate and ongoing full collateralization on derivative instruments in net liability positions. Talen Energy's credit rating is currently below investment grade. Additionally, certain derivative contracts contain credit risk-related contingent features that require adequate assurance of performance be provided if the other party has reasonable concerns regarding the performance of Talen Energy's obligation under the contract. A counterparty demanding adequate assurance could require a transfer of additional collateral or other security, including letters of credit, cash and guarantees from a creditworthy entity. This would typically involve negotiations among the parties. However, amounts disclosed below represent assumed immediate payment or immediate and ongoing full collateralization for derivative instruments in net liability positions with "adequate assurance" features. At December 31, 2015 , the value of derivative contracts in a net liability position that contain credit risk-related contingent features was $70 million . Collateral posted on those positions was $71 million and the additional potential collateral requirements, primarily related to further adequate assurance features, were $34 million , which is net of receivables and payables already recorded on the Balance Sheet. |
Goodwill and Other Asset Impair
Goodwill and Other Asset Impairments | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Asset Impairments | Goodwill and Other Asset Impairments U.S. GAAP requires that a long-lived asset (or asset group) be tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Similarly, a goodwill impairment test is performed annually or more frequently if events or changes in circumstances indicate that more likely than not the carrying amount of a reporting unit may be greater than its fair value. During the second quarter of 2015, due to the impairment of its investment in PPL Energy Supply recorded by PPL (Talen Energy's former parent) at the time of the spinoff, coupled with, and, primarily driven by, Talen Energy Corporation's stock price at the spinoff date, Talen Energy's management concluded that these factors could be indicators of potential impairment with respect to certain long-lived assets and goodwill. After considering additional information, Talen Energy determined that the undiscounted cash flows for potentially affected long-lived assets would not be directly impacted by these factors and therefore concluded that the undiscounted cash flows continued to exceed the carrying value and no further testing of long-lived assets was necessary in the second quarter. Management also performed an interim goodwill impairment assessment as of June 1, 2015, the spinoff and acquisition date. The goodwill impairment analysis is a two-step process. The first step, used to identify potential impairment, is a comparison of the reporting unit's estimated fair value to its carrying value, including goodwill. If the fair value of the reporting unit exceeds its carrying value, applicable goodwill is not considered to be impaired. If the carrying value exceeds the fair value, there is an indication of impairment and the second step is performed to measure the amount of the impairment, if any. The second step requires a company to calculate an implied fair value of goodwill based on a hypothetical purchase price allocation. The East reporting unit, which is equivalent to the East segment, failed step one as of June 1, 2015. The step two analysis was not able to be completed by the filing of the second quarter Form 10-Q. As provided for in the applicable accounting guidance, no goodwill impairment charge was recorded based on management's best estimate at that time, which was confirmed when the second quarter analysis was subsequently completed. In the third quarter of 2015, Talen Energy updated its fundamental pricing models in conjunction with market information gained as a result of the 2018/2019 planning year PJM capacity auction completed in August 2015. As a result, Talen Energy assessed certain long-lived assets for impairment and determined that the C.P. Crane coal-fired plant failed a recoverability test and as a result, recorded an impairment charge based on the plant's estimated fair value at September 30, 2015. Additionally, because the Sapphire plants were classified as held for sale and must be carried at the lower of its current carrying value or fair value less cost to sell, Talen Energy used updated cash flow information to calculate the estimated fair value of the Sapphire plants at September 30, 2015 and recorded an impairment charge based on estimated fair value. At November 30, 2015, in connection with the Sapphire plants being reclassified to held and used and continuing operations from held for sale and discontinued operations, management reassessed the fair value of each facility and recorded additional impairment charges. See Note 14 for additional information on these fair value estimates and the resulting non-cash asset impairment charges. In addition, management's forward view of energy and capacity prices in PJM used in its fundamental pricing models, along with the consideration of other market information, has put pressure on the recoverability assessment of Talen Energy's other coal-fired generation assets. In December 2015, based on the availability of new gas price forecasts, management updated its fundamental view for long-term power, capacity and gas prices. Based upon the change in this fundamental view, management tested its coal-fired generation located primarily within the PJM market for impairment and concluded that the plants were not impaired at December 31, 2015. The recoverability assessment is very sensitive to forward energy and capacity price assumptions as well as forecasted operation and maintenance and capital spending. Therefore, a further decline in forecasted long-term energy or capacity prices or changes in environmental laws requiring additional capital or operation and maintenance expenditures, could negatively impact Talen Energy's operations primarily at its PJM based coal-fired facilities and potentially result in impairment charges for some or all of the carrying value of these plants. The carrying value of Talen Energy's coal-fired generation assets was more than $3 billion as of December 31, 2015. Finally, Talen Energy Corporation's stock price declined significantly throughout the third quarter of 2015, indicating a significant change in the financial markets' view of the value of Talen Energy's business and/or the industry in which it operates and potential risks associated with an investment in Talen Energy Corporation's common stock. As a result, Talen Energy management concluded that these factors could be indicators of goodwill impairment and reconsidered certain inputs incorporated in its assessment of fair value of both Talen Energy's overall business and the East reporting unit, where all of the goodwill was assigned. These inputs include risk premiums, growth rates, Talen Energy Corporation's stock price expectations and implied multiples from comparable companies' stock prices. Based on this reassessment, the East reporting unit further declined in fair value, when compared to the value calculated in the second quarter of 2015 and again failed step one as of September 30, 2015. The step two analysis was also completed during the third quarter and resulted in a non-cash goodwill impairment charge of $466 million pre-tax recorded for the East segment included within "Income (Loss) from Continuing Operations" in the Statement of Income for the year ended December 31, 2015. The impairment charge represented all of the goodwill reflected on the Balance Sheet. Most of the impaired goodwill is not deductible for tax purposes and there is no cash tax benefit related to the impairment. To estimate the fair value of Talen Energy's overall business and the East reporting unit, Talen Energy performed an internal analysis using a combination of a market approach using comparable businesses and an income approach based on discounted cash flows. Assumptions used in the discounted cash flow model, in addition to those discussed above, were the forward energy and capacity price curves, forecasted generation, and forecasted operation, maintenance and capital expenditures and a market participant discount rate. The market approach primarily applies EBITDA multiples, based on the implied market value of comparable publicly traded companies, to Talen Energy's and the East reporting unit's EBITDA to determine estimated fair values. During the fourth quarter of 2015, Talen Energy recorded various adjustments to the purchase price allocation for the RJS Power acquisition resulting in an adjustment to the goodwill recognized for the acquisition, which resulted in an insignificant adjustment to the previously recorded goodwill impairment. The changes in carrying amount of Talen Energy's goodwill by segment for the years ended December 31 were as follows. East West Total 2015 2014 2015 2014 2015 2014 Balance at beginning of period (a) $ 72 $ 72 $ — $ 14 $ 72 $ 86 Goodwill recognized during the period (b) 393 — — — 393 — Allocation to discontinued operations (c) — — — (14 ) — (14 ) Impairment (465 ) — — — (465 ) — Balance at end of period (a) $ — $ 72 $ — $ — $ — $ 72 (a) There was no accumulated impairment loss related to goodwill at December 31, 2014 and $465 million at December 31, 2015. (b) Recognized as a result of the acquisition of RJS Power. See Note 6 for additional information. (c) Goodwill allocated to the sale of the Talen Montana hydroelectric generating facilities and written off. See Note 6 for additional information related to the sale. In 2014 and 2013, Talen Energy also recorded impairments related to the Kerr Dam project and Corette plant, both in Montana. See Note 14 for additional information. |
Other Intangible Assets
Other Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangible Assets | Other Intangible Assets The gross carrying amount and the accumulated amortization of other intangible assets were: December 31, 2015 December 31, 2014 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Land and transmission rights $ 16 $ 13 $ 17 $ 14 Emission allowances/RECs (a) 9 10 Licenses and other (b) (c) 325 23 270 19 Total $ 350 $ 36 $ 297 $ 33 (a) Includes emission allowances and RECs that are expensed when consumed or sold; therefore, there is no accumulated amortization. (b) "Other" includes costs for the development of licenses, the most significant of which is the COLA. Amortization of these costs begins when the related asset is placed in service. See Note 6 for additional information on the COLA. (c) "Other" also includes intangibles acquired as part of the RJS Power acquisition including $28 million for a pipeline lease that is being amortized over a 14 year period and $16 million for an ash site permit that is being amortized over a 22 year period. Current intangible assets are included in "Other current assets" and long-term intangible assets are presented as "Other intangibles" on the Balance Sheets. Amortization expense for the years ended December 31, excluding consumption of emission allowances, RECs and RGGI credits of $44 million , $24 million and $23 million in 2015 , 2014 , and 2013 , was as follows: 2015 2014 2013 Amortization Expense $ 4 $ 4 $ 5 Amortization expense, excluding consumption of emission allowances and RGGI credits is expected to be insignificant in future years. |
Asset Retirement Obligations
Asset Retirement Obligations | 12 Months Ended |
Dec. 31, 2015 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Asset Retirement Obligations Talen Energy has recorded AROs to reflect various legal obligations associated with the retirement of long-lived assets, the most significant of which relates to the decommissioning of the Susquehanna nuclear plant. Assets in the NDT funds are legally restricted for the purpose of settling this ARO. See Notes 14 and 19 for additional information on the nuclear decommissioning trust funds. Other AROs recorded relate to various environmental requirements for coal piles, ash basins and other waste basin retirements. Talen Energy has recorded several conditional AROs, the most significant of which is related to the removal and disposal of asbestos-containing material. In addition to the AROs that were recorded for asbestos-containing material, Talen Energy identified other asbestos-related obligations, but was unable to reasonably estimate their fair values. Talen Energy management was unable to reasonably estimate a settlement date or range of settlement dates for the remediation of all of the asbestos-containing material at certain of the generation plants. If economic events or other circumstances change that enable Talen Energy to reasonably estimate the fair value of these retirement obligations, they will be recorded at that time. Talen Energy also identified legal retirement obligations associated with the retirement of a reservoir that could not be reasonably estimated due to an indeterminable settlement date. The changes in the carrying amounts of Talen Energy's AROs were as follows. 2015 2014 ARO at beginning of period $ 425 $ 404 Accretion expense 35 32 Changes in estimate of cash flow or settlement date (a) 25 (16 ) Obligations assumed in RJS Power acquisition 18 — Obligations incurred 2 13 Obligations settled (4 ) (8 ) ARO at end of period $ 501 $ 425 (a) Includes increases in 2015 of $41 million as a result of a new CCR rule. Further changes to the AROs may be required as estimates are refined and analysis of the rule continues. Substantially all of the ARO balances are classified as non-current at December 31, 2015 and 2014 . |
Available-for-Sale Securities
Available-for-Sale Securities | 12 Months Ended |
Dec. 31, 2015 | |
Available-for-sale Securities [Abstract] | |
Available-for-Sale Securities | Available-for-Sale Securities Securities held by Talen Energy's NDT funds and auction rate securities are classified as available-for-sale. The following table shows the amortized cost, the gross unrealized gains and losses recorded in AOCI and the fair value of Talen Energy's available-for-sale securities. December 31, 2015 December 31, 2014 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value NDT funds: Cash and cash equivalents $ 11 $ — $ — $ 11 $ 19 $ — $ — $ 19 Equity securities 297 406 — 703 283 417 — 700 Debt securities 230 7 — 237 218 11 — 229 Receivables/payables, net — — — — 2 — — 2 Total NDT funds $ 538 $ 413 $ — $ 951 $ 522 $ 428 $ — $ 950 Auction rate securities $ 6 $ — $ — $ 6 $ 8 $ — $ — $ 8 See Note 14 for details on the securities held by the NDT funds. There were no securities with credit losses at December 31, 2015 and 2014 . The following table shows the scheduled maturity dates of debt securities held at December 31, 2015 . Maturity Less Than 1 Year Maturity 1-5 Years Maturity 6-10 Years Maturity in Excess of 10 Years Total Amortized cost $ 7 $ 101 $ 67 $ 61 $ 236 Fair value 7 102 69 65 243 The following table shows proceeds from and realized gains and losses on sales of available-for-sale securities. 2015 2014 2013 Proceeds from sales of NDT securities (a) $ 180 $ 154 $ 144 Other proceeds from sales 2 9 — Gross realized gains (b) 26 23 17 Gross realized losses (b) 22 10 7 (a) These proceeds are used to pay income taxes and fees related to managing the trust. Remaining proceeds are reinvested in the trust. (b) Excludes the impact of other-than-temporary impairment charges recognized on the Statements of Income. NDT Funds Amounts previously collected from PPL Electric's customers for decommissioning the Susquehanna nuclear plant, less applicable taxes, were deposited in external trust funds for investment and can only be used for future decommissioning costs. To the extent that the actual costs for decommissioning exceed the amounts in the nuclear decommissioning trust funds, Susquehanna Nuclear would be obligated to fund 90% of the shortfall. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The after-tax changes in Talen Energy's AOCI by component for the years ended December 31 were as follows. Unrealized gains (losses) Defined benefit plans Available- for-sale securities Qualifying derivatives Prior service costs Actuarial gain (loss) Total December 31, 2012 $ 112 $ 211 $ (10 ) $ (265 ) $ 48 Amounts arising during the period 67 — 2 71 140 Reclassifications from AOCI (6 ) (123 ) 4 14 (111 ) Net OCI during the period 61 (123 ) 6 85 29 December 31, 2013 $ 173 $ 88 $ (4 ) $ (180 ) $ 77 Amounts arising during the period 35 — 8 (120 ) (77 ) Reclassifications from AOCI (6 ) (25 ) 3 5 (23 ) Net OCI during the period 29 (25 ) 11 (115 ) (100 ) December 31, 2014 $ 202 $ 63 $ 7 $ (295 ) $ (23 ) Amounts arising during the period (6 ) — (3 ) 46 37 Reclassifications from AOCI (2 ) (19 ) (1 ) (18 ) (40 ) Net OCI during the period (8 ) (19 ) (4 ) 28 (3 ) December 31, 2015 $ 194 $ 44 $ 3 $ (267 ) $ (26 ) The following table presents the gains (losses) and related income taxes for reclassifications from Talen Energy's AOCI for the years ended December 31 . The defined benefit plan components of AOCI are not reflected in their entirety in the statement of income during the years; rather, they are included in the computation of net periodic defined benefit costs (credits). See Note 9 for additional information. Affected Line Item on the Details about AOCI 2015 2014 Statements of Income Available-for-sale securities $ 4 $ 13 Other Income (Expense) - net Income Taxes (2 ) (7 ) Total After-tax 2 6 Qualifying derivatives Commodity contracts (3 ) 1 Wholesale energy 33 31 Energy purchases — 8 Discontinued operations 1 2 Other Total Pre-tax 31 42 Income Taxes (12 ) (17 ) Total After-tax 19 25 Defined benefit plans Prior service costs 1 (4 ) Net actuarial loss 29 (9 ) Total Pre-tax 30 (13 ) Income Taxes (11 ) 5 Total After-tax 19 (8 ) Total reclassifications during the period $ 40 $ 23 |
New Accounting Guidance Pending
New Accounting Guidance Pending Adoption | 12 Months Ended |
Dec. 31, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Guidance Pending Adoption | New Accounting Guidance Pending Adoption Accounting for Revenue from Contracts with Customers In May 2014, the FASB issued accounting guidance that establishes a comprehensive new model for the recognition of revenue from contracts with customers. This model is based on the core principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance can be applied using either a full retrospective or modified retrospective transition method. In August 2015, the FASB issued guidance that defers the effective date of the standard by one year, which for public business entities, results in initial application of this guidance in annual reporting periods beginning after December 15, 2017 and interim periods within those years. Entities may early adopt the guidance as of the original effective date of the standard, which for public business entities is annual reporting periods beginning after December 15, 2016. Talen Energy expects to adopt this guidance effective January 1, 2018. Talen Energy is currently assessing the impact of adopting this guidance, as well as the transition method it will use. Reporting Uncertainties about an Entity's Ability to Continue as a Going Concern In August 2014, the FASB issued accounting guidance which will require management to assess, for each interim and annual period, whether there are conditions or events that raise substantial doubt about an entity's ability to continue as a going concern. Substantial doubt about an entity's ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date the financial statements are issued. When management identifies conditions or events that raise substantial doubt about an entity's ability to continue as a going concern, management is required to disclose information that enables users of the financial statements to understand the principal conditions or events that raised substantial doubt about the entity's ability to continue as a going concern and management's evaluation of the significance of those conditions or events. If substantial doubt about the entity's ability to continue as a going concern has been alleviated as a result of management's plan, the entity should disclose information that allows the users of the financial statements to understand those plans. If the substantial doubt about the entity's ability to continue as a going concern is not alleviated by management's plans, management's plans to mitigate the conditions or events that gave rise to the substantial doubt about the entity's ability to continue as a going concern should be disclosed, as well as a statement that there is substantial doubt the entity's ability to continue as a going concern within one year after the date the financial statements are issued. For all entities, this guidance should be applied prospectively within the annual periods ending after December 15, 2016, and for annual periods and interim periods thereafter. Early adoption is permitted. Talen Energy will adopt this guidance for the annual period ending December 31, 2016. The adoption of this guidance is not expected to have a significant impact. Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity In November 2014, the FASB issued guidance that clarifies how current accounting guidance should be interpreted when evaluating the economic characteristics and risks of a host contract of a hybrid financial instrument issued in the form of a share. This guidance does not change the current criteria for determining whether separation of an embedded derivative feature from a hybrid financial instrument is required. Entities are still required to evaluate whether the economic risks of the embedded derivative feature are clearly and closely related to those of the host contract, among other relevant criteria. An entity should consider the substantive terms and features of the entire hybrid financial instrument, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of the host contract to determine whether the host contract is more akin to a debt instrument or more akin to an equity instrument. An entity should assess the relative strength of the debt-like and equity-like terms and features when determining how to weight those terms and features. For public business entities, this guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 and should be applied using a modified retrospective method for existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year the guidance is adopted. Early adoption is permitted. Retrospective application is permitted but not required. Talen Energy will adopt this guidance effective January 1, 2016. The adoption of this guidance is not expected to have a significant impact. Simplifying the Presentation of Debt Issuance Costs In April 2015, the FASB issued accounting guidance to simplify the presentation of debt issuance costs by requiring debt issuance costs to be presented on the balance sheet as a direct deduction from the carrying amount of the associated debt liability, consistent with the presentation of debt discounts. Because this guidance did not address the treatment of debt issuance costs related to line-of-credit arrangements, additional guidance was issued in August 2015 stating that an entity may defer and amortize debt issuance costs over the term of a line-of-credit arrangement, regardless of whether there are any related outstanding borrowings. For public business entities, this guidance should be applied retrospectively for financial statements issued for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. Early adoption is permitted. Talen Energy will adopt this guidance effective January 1, 2016. The adoption of this guidance will require Talen Energy to reclassify debt issuance costs from assets to long-term debt, and is not expected to have a significant impact. Recognition of Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued accounting guidance that affects the accounting for equity investments, financial liabilities under the fair value option, and the disclosure requirements for financial instruments. This guidance generally requires entities to measure equity investments that are not accounted for under the equity method of accounting and do not result in consolidation at fair value and recognize any changes in fair value in net income. Entities may elect to record equity investments without readily determinable fair values at cost, less impairment, adjusted for observable price changes. The impairment model for equity investments subject to this election is a single-step qualitative assessment performed each quarter. For financial liabilities measured using the fair value option, changes in fair value related to instrument-specific credit risk to be presented separately within OCI. For public business entities, this guidance should generally be applied prospectively for financial statements issued for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is generally not permitted, although entities may early adopt the provision related to financial liabilities under the fair value option. Talen Energy expects to adopt this guidance effective January 1, 2018. Upon adoption, an entity will record a cumulative-effect adjustment to beginning retained earnings as of the beginning of the first reporting period in which the guidance is adopted, with the exception that the amendments related to equity securities with readily determined fair values should be applied prospectively. Talen Energy is currently assessing the impact of adopting this guidance, which may be significant for equity securities held in the NDT funds. Accounting for Leases In February 2016, the FASB issued accounting guidance that updates the accounting for leases. The updated guidance will require lessees to recognize assets and liabilities for the rights and obligations created by their leases with lease terms of more than 12 months. Consistent with current accounting guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance (similar to the current capital lease) or an operating lease. However, unlike current accounting guidance, which requires only capital leases to be recognized on the balance sheet, the new accounting guidance will require both types of leases to be recognized on the balance sheet. The new accounting guidance also will require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements. The accounting by lessors will remain largely unchanged. However, the new accounting guidance contains some targeted improvements that are intended to align, where necessary, lessor accounting with the lessee accounting model and with the updated revenue recognition guidance issued in 2014 and discussed above. For public business entities, this guidance is effective for annual reporting periods beginning after December 15, 2018 and interim periods within those years. Early application is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. An entity that elects to apply the practical expedients will, in effect, continue to account for leases that commence before the effective date in accordance with previous accounting guidance unless the lease is modified, except that lessees are required to recognize a right-of-use asset and a lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous accounting guidance. Talen Energy is currently assessing the impact of adopting this guidance and expects to adopt this guidance effective January 1, 2019. |
Schedule I - Talen Energy Corpo
Schedule I - Talen Energy Corporation | 12 Months Ended |
Dec. 31, 2015 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Schedule I - Talen Energy Corporation | SCHEDULE I - TALEN ENERGY CORPORATION CONDENSED UNCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Millions of Dollars, except share data) Year Ended December 31, 2015 (a) Inception through December 31, 2014 (a) Operating Revenues $ — $ — Operating Expenses — — Operating Income (Loss) — — Other Income (Expense) - net Equity in earnings of subsidiaries (373 ) — Total Other Income (Expense) - net (373 ) — Net Income (Loss) Attributable to Talen Energy Corporation Stockholders $ (373 ) $ — Comprehensive Income (Loss) Attributable to Talen Energy Corporation Stockholders $ (449 ) $ — Earnings Per Share of Common Stock: Net Income (Loss) Available to Talen Energy Corporation Common Stockholders Basic $ (2.90 ) $ — Diluted $ (2.90 ) $ — Weighted-Average Shares of Common Stock Outstanding (in thousands) (b) Basic 128,509 — Diluted 128,509 — (a) Talen Energy Corporation was incorporated in June 2014 and its business operations began in June 2015 after the completion of its spinoff from PPL. Therefore, the 2015 results are primarily from June 1 to December 31, while the 2014 results are from the same period. See Note 1 to the Unconsolidated Financial Statements for additional information. (b) Weighted average shares were calculated for the seven month period from June 1, 2015 to December 31, 2015. The accompanying Notes to Condensed Unconsolidated Financial Statements are an integral part of the financial statements. SCHEDULE I - TALEN ENERGY CORPORATION CONDENSED UNCONSOLIDATED STATEMENTS OF CASH FLOWS (Millions of Dollars) Year Ended December 31, 2015 (a) Inception through December 31, 2014 (a) Cash Flows from Operating Activities Net cash provided by (used in) operating activities $ — $ — Cash Flows from Investing Activities Net cash provided by (used in) investing activities — — Cash Flows from Financing Activities Net cash provided by (used in) financing activities — — Net Increase (Decrease) in Cash and Cash Equivalents — — Cash and Cash Equivalents at Beginning of Period — — Cash and Cash Equivalents at End of Period $ — $ — (a) Talen Energy Corporation was incorporated in June 2014 and its business operations began in June 2015 after the completion of its spinoff from PPL. Therefore, the 2015 results are primarily from June 1 to December 31, while the 2014 results are from the same period. See Note 1 to the Unconsolidated Financial Statements for additional information. The accompanying Notes to Condensed Unconsolidated Financial Statements are an integral part of the financial statements. SCHEDULE I - TALEN ENERGY CORPORATION CONDENSED UNCONSOLIDATED BALANCE SHEETS AT DECEMBER 31, (Millions of Dollars, shares in thousands) 2015 2014 Assets Investments Affiliated companies at equity $ 4,303 $ — Total Assets $ 4,303 $ — Liabilities and Equity Equity Common stock - $0.001 par value (a) $ — $ — Additional paid-in capital 4,702 — Accumulated deficit (373 ) — Accumulated other comprehensive loss (26 ) — Total Equity 4,303 — Total Liabilities and Equity $ 4,303 $ — (a) 1,000,000 shares authorized; 128,509 shares issued and outstanding at December 31, 2015. The accompanying Notes to Condensed Unconsolidated Financial Statements are an integral part of the financial statements. SCHEDULE I - TALEN ENERGY CORPORATION NOTES TO CONDENSED UNCONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation In June 2014, Talen Energy Corporation was incorporated in connection with PPL and Talen Energy Supply executing definitive agreements with the Riverstone Holders to combine their competitive power generation businesses into a new, stand-alone, publicly traded company named Talen Energy Corporation. On June 1, 2015, PPL completed the spinoff to PPL shareowners of a newly formed entity, Talen Energy Holdings, Inc. (Holdco), which at such time owned all of the membership interests of Talen Energy Supply and all of the common stock of Talen Energy Corporation. Immediately following the spinoff, Holdco merged with a special purpose subsidiary of Talen Energy Corporation, with Holdco continuing as the surviving company to the merger and as a wholly owned subsidiary of Talen Energy Corporation and the sole owner of Talen Energy Supply. As a result, the operating results reflected on the Statement of Income represent activity that occurred after June 1, 2015. Talen Energy Corporation conducts substantially all of its business operations through its subsidiaries. Substantially all of its consolidated assets are held by such subsidiaries. These condensed unconsolidated financial statements and related footnotes have been prepared in accordance with Reg §210.12-04 of Regulation S-X. On an unconsolidated basis, there is no comparable information for Talen Energy Corporation prior to the June 1, 2015 spinoff from PPL. These statements should be read in conjunction with the consolidated financial statements and notes thereto of Talen Energy Corporation. Talen Energy Corporation indirectly or directly owns all of the ownership interests of its significant subsidiaries. See Note 5 to Talen Energy Corporation's consolidated financial statements for discussions on restricted net assets of its subsidiaries for the purpose of transferring funds to Talen Energy Corporation in the form of distributions, loans or advances. 2. Commitments and Contingencies See Note 11 to Talen Energy Corporation's consolidated financial statements for commitments and contingencies of its subsidiaries. Guarantees and Other Assurances Talen Energy Corporation's subsidiaries are separate and distinct legal entities and have no obligation to pay any amounts that may become due under Talen Energy Corporation's guarantees or other assurances or to make any funds available for such payment. In the normal course of business, Talen Energy Corporation enters into agreements that provide financial assurance to third parties on behalf of certain subsidiaries. Such agreements include surety bonds issued by insurance companies. These agreements are entered into primarily to support or enhance the creditworthiness attributed to a subsidiary on a stand-alone basis or to facilitate the commercial activities in which these subsidiaries engage. |
Quarterly Financial Data
Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data | QUARTERLY FINANCIAL DATA (UNAUDITED) Talen Energy Corporation and Subsidiaries (Millions of Dollars, except per share data) For the 2015 Quarters Ended (a) For the 2014 Quarters Ended (a) Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Operating revenues as previously reported $ 946 $ 1,065 $ 1,419 $ (955 ) $ 1,007 $ 1,601 $ 2,083 Reclassification between revenue and expense (b) 145 (125 ) (135 ) 1,901 83 (409 ) (730 ) Reclassification from discontinued operations (c) — 8 36 — — — — Operating revenues 1,091 948 1,320 $ 1,122 946 1,090 1,192 1,353 Operating Income (Loss) as previously reported 34 (246 ) Reclassification from discontinued operations (c) 1 (100 ) Operating Income (Loss) 178 35 (346 ) 94 (79 ) 16 189 271 Income (Loss) from continuing operations after income taxes as previously reported 25 (339 ) Reclassification from discontinued operations (c) 1 (62 ) Income (Loss) from continuing operations after income taxes 96 26 (401 ) (62 ) (58 ) 2 94 149 Income (Loss) from discontinued operations as previously reported 1 (62 ) Reclassification from discontinued operations (c) (1 ) 62 Income (Loss) from discontinued operations — — — — (8 ) 11 7 213 Net Income (Loss) Attributable to Talen Energy Corporation stockholders (d) 96 26 (401 ) (62 ) (66 ) 13 101 362 Income (Loss) from continuing operations after income taxes available to Talen Energy Corporation stockholders (e) Basic EPS 1.15 0.26 (3.12 ) (0.48 ) (0.69 ) 0.03 1.13 1.78 Diluted EPS (f) 1.15 0.26 (3.12 ) (0.48 ) (0.69 ) 0.03 1.13 1.78 Net Income (Loss) available to Talen Energy Corporation stockholders (e) Basic EPS 1.15 0.26 (3.12 ) (0.48 ) (0.79 ) 0.16 1.21 4.33 Diluted EPS (f) 1.15 0.26 (3.12 ) (0.48 ) (0.79 ) 0.16 1.21 4.33 (a) Quarterly results can vary depending on, among other things, weather and the forward pricing of power. Accordingly, comparisons among quarters of a year may not be indicative of overall trends and changes in operations. (b) In the fourth quarter of 2015, Talen Energy reclassified amounts between "Wholesale energy" within operating revenues and "Energy purchases" within operating expense on the Statements of Income. See Note 1 to the Financial Statements for additional information. (c) In the fourth quarter of 2015, the Sapphire operations, which were originally classified as discontinued operations as part of the RJS Power acquisition, were reclassified to continuing operations. See Note 1 to the Financial Statements for additional information. (d) The third and fourth quarters of 2015 include impairment charges related to goodwill, the Sapphire plants and the C.P. Crane plant. The fourth quarter of 2014 includes a gain of $137 million (after tax) from the sale of hydroelectric generating facilities of Talen Montana. See Note 6 to the Financial Statements for additional information on the sale and Notes 14 and 16 to the Financial Statements for additional information on the impairments. (e) The sum of the quarterly amounts may not equal annual earnings per share due to changes in the number of common shares outstanding during the year or rounding. (f) As a result of reported losses, weighted-average shares used in the diluted earnings per share computations for the quarters ended September 30 and December 31, 2015 excludes incremental shares as they were anti-dilutive. |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Loss Accruals | Loss Accruals Potential losses are accrued when (1) information is available that indicates it is "probable" that a loss has been incurred, given the likelihood of the uncertain future events and (2) the amount of the loss can be reasonably estimated. Accounting guidance defines "probable" as cases in which "the future event or events are likely to occur." Talen Energy continuously assesses potential loss contingencies for environmental remediation, litigation claims, regulatory penalties and other events. Loss accruals for environmental remediation are discounted when appropriate. |
Reclassifications | Reclassifications Certain amounts in the prior period financial statements have been reclassified to conform to current period's presentation, including the change in presentation discussed below. The reclassifications did not affect operating income, net income or equity. In these financial statements, revenue and expense from derivatives is recorded based on Talen Energy's economic hedging strategy. For example, all purchases and sales associated with economic hedging of the sale of energy using contracts accounted for as derivatives are recorded within "Operating Revenues" and all purchases and sales associated with economic hedging of the procurement of fuel or purchasing energy using contracts accounted for as derivatives are recorded as "Operating Expenses" on the Statements of Income. Prior to 2015, Talen Energy classified all non-trading commodity hedge transactions as revenue or expense based upon whether each specific transaction was a sale or purchase, which in certain instances, created losses within revenue and gains within expense. As a result of this change in presentation, there was an equal and offsetting increase of $845 million in 2014 and a decrease of $19 million in 2013 primarily in "Wholesale energy" and "Energy purchases" on the Statements of Income. |
Earnings Per Share | Earnings Per Share for Talen Energy Corporation See Note 3 for information on the calculation of EPS. |
Price Risk Management | Energy and energy-related contracts are used to hedge the variability of expected cash flows associated with the competitive generating units and marketing activities, as well as for trading purposes. Interest rate contracts may be utilized to hedge exposures to changes in the fair value of debt instruments and to hedge exposures to variability in expected cash flows associated with existing floating-rate debt instruments or forecasted fixed-rate issuances of debt. Similar derivatives may receive different accounting treatment, depending on management's intended use and documentation. Certain energy and energy-related contracts meet the definition of a derivative, while others do not meet the definition of a derivative because they lack a notional amount or a net settlement provision. In cases where there is no net settlement provision, markets are periodically assessed to determine whether market mechanisms have evolved that would facilitate net settlement. Certain derivative energy contracts have been excluded from the requirements of derivative accounting treatment because NPNS has been elected. These contracts are accounted for using accrual accounting. All other contracts that have been classified as derivative contracts are reflected on the balance sheets at fair value. These contracts are recorded as "Price risk management assets" and "Price risk management liabilities" on the Balance Sheets. The portion of derivative positions that settle within a year are included in "Current Assets" and "Current Liabilities," while the portion of derivative positions that settle beyond a year are recorded in "Other Noncurrent Assets" and "Deferred Credits and Other Noncurrent Liabilities." Talen Energy considers intra-month transactions to be spot activity, which is not accounted for as a derivative. Energy and energy-related contracts are assigned a strategy and accounting classification. Processes exist that allow for subsequent review and validation of the contract information. See Note 15 for more information. The accounting department provides the traders and the risk management department with guidelines on appropriate accounting classifications for various contract types and strategies. Some examples of these guidelines include, but are not limited to: • Physical coal, limestone, lime, uranium, electric transmission, gas transportation, gas storage and renewable energy credit contracts not traded on an exchange are not derivatives due to the lack of net settlement provisions. • Only contracts where physical delivery is deemed probable throughout the entire term of the contract can qualify for NPNS. • Derivative transactions that do not qualify for NPNS, or for which NPNS treatment is not elected, are recorded at fair value through earnings. A similar process is also followed by the treasury department as it relates to interest rate derivatives. Examples of accounting guidelines provided to the treasury department staff include, but are not limited to: • Transactions to lock in an interest rate prior to a debt issuance can be designated as cash flow hedges, to the extent the forecasted debt issuances remain probable of occurring. • Transactions entered into to hedge fluctuations in the fair value of existing debt can be designated as fair value hedges. Cash inflows and outflows related to derivative instruments are included as a component of operating, investing or financing activities on the Statements of Cash Flows, depending on the classification of the hedged items. Talen Energy has elected not to offset net derivative positions against the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) under master netting arrangements. Talen Energy reflects its net realized and unrealized gains and losses associated with all derivatives that are held for trading purposes in "Wholesale energy" on the Statements of Income. See Notes 14 and 15 for additional information on derivatives. All derivative instruments are recorded at fair value on the Balance Sheet as an asset or liability unless NPNS is elected. NPNS contracts for Talen Energy include certain full-requirement sales contracts, other physical purchase and sales contracts and certain retail energy and physical capacity contracts. Changes in the fair value of derivatives not designated as NPNS are recognized currently in earnings. Talen Energy has many physical and financial commodity purchases and sales contracts that economically hedge commodity price risk. Certain of the economic hedging strategies employed by Talen Energy utilize a combination of financial purchases and sales contracts. Realized and unrealized gains (losses) on these contracts are recorded currently in earnings. Generally each contract is considered a unit of account and Talen Energy presents gains (losses) on physical and financial commodity contracts based upon their economic hedging strategy. Generation revenue hedge strategies are recorded in "Wholesale energy" on the Statements of Income. Retail sales strategies are recorded in "Retail energy" on the Statements of Income. Gas, oil and coal generation supply strategies are recorded in "Fuel" on the Statements of Income. Non-generation power and fuel supply strategies are recorded in "Energy purchases" on the Statements of Income. Certain Talen Energy subsidiaries participate in RTOs and ISOs. Talen Energy accounts for these transactions on a net hourly basis because the transactions are settled on a net hourly basis. Talen Energy records realized hourly net sales or purchases of physical power with RTOs and ISOs in its Statements of Income as "Wholesale energy" if in a net sales position and "Energy purchases" if in a net purchase position. |
Revenue Recognition | Revenue Recognition Operating revenues from the sale of energy, capacity and ancillary services are recognized when the product or service is delivered to a customer or contractually earned, unless they meet the definition of and are accounted for as derivatives. See "Accounting and Reporting" in Note 15 for additional information on the accounting for derivatives. Operating revenues are recorded based on energy deliveries through the end of the calendar month. Unbilled retail revenues result because customers' meters are read and bills are rendered throughout the month, rather than all being read at the end of the month. Unbilled revenues for a month are calculated by multiplying an estimate of unbilled kWh by the estimated average cents per kWh. Unbilled wholesale energy revenues are recorded at month-end to reflect estimated amounts until actual dollars and MWhs are confirmed and invoiced. Immaterial differences between estimated and actual revenues are adjusted the following month. "Energy-related businesses" revenue primarily includes revenue from Talen Energy's mechanical contracting and engineering subsidiaries. These subsidiaries record revenue from construction contracts on the percentage-of-completion method of accounting, measured by the actual cost incurred to date as a percentage of the estimated total cost for each contract. Accordingly, costs and estimated earnings in excess of billings on uncompleted contracts are recorded within "Unbilled revenues" on the Balance Sheets, and billings in excess of costs and estimated earnings on uncompleted contracts are recorded within "Other current liabilities" on the Balance Sheets. |
Accounts Receivable | Accounts Receivable Accounts receivable are reported on the Balance Sheets at the gross outstanding amount adjusted for an allowance for doubtful accounts. Accounts receivable that are acquired are initially recorded at fair value on the date of acquisition. Accounts receivable collectability is evaluated using a combination of factors, including past due status based on contractual terms, trends in write-offs, the age of the receivable, counterparty creditworthiness and economic conditions. Specific events, such as bankruptcies, are also considered. Adjustments to the allowance for doubtful accounts are made when necessary based on the results of analysis, the aging of receivables and historical and industry trends. Accounts receivable are written off in the period in which the receivable is deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when it is known they will be received. |
Cash | Cash Cash Equivalents All highly liquid investments with original maturities of three months or less are considered to be cash equivalents. Restricted Cash and Cash Equivalents Bank deposits and other cash equivalents that are restricted by agreement or that have been clearly designated for a specific purpose are classified as restricted cash and cash equivalents. The change in restricted cash and cash equivalents is reported as an investing activity on the Statements of Cash Flows. On the Balance Sheets, the current portion of restricted cash and cash equivalents is shown as "Restricted cash and cash equivalents" while the noncurrent portion is included in "Other noncurrent assets." |
Fair Value Measurements | Fair Value Measurements Talen Energy values certain financial and nonfinancial assets and liabilities at fair value. Generally, the most significant fair value measurements relate to price risk management assets and liabilities, investments in securities including investments in the NDT funds and defined benefit plans, and cash and cash equivalents. Talen Energy uses, as appropriate, a market approach (generally, data from market transactions), an income approach (generally, present value techniques and option-pricing models) and/or a cost approach (generally, replacement cost) to measure the fair value of an asset or liability. These valuation approaches incorporate inputs such as observable, independent market data and/or unobservable data that management believes are predicated on the assumptions market participants would use to price an asset or liability. These inputs may incorporate, as applicable, certain risks such as nonperformance risk, which includes credit risk. Talen Energy classifies fair value measurements within one of three levels in the fair value hierarchy. The level assigned to a fair value measurement is based on the lowest level input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are as follows: Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date. Active markets are those in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 - inputs other than quoted prices included within Level 1 that are either directly or indirectly observable for substantially the full term of the asset or liability. Level 3 - unobservable inputs that management believes are predicated on the assumptions market participants would use to measure the asset or liability at fair value. Assessing the significance of a particular input requires judgment that considers factors specific to the asset or liability. As such, Talen Energy's assessment of the significance of a particular input may affect how the assets and liabilities are classified within the fair value hierarchy. |
Investments | Investments Generally, the original maturity date of an investment and management's intent and ability to sell an investment prior to its original maturity determine the classification of investments as either short-term or long-term. Investments that would otherwise be classified as short-term, but are restricted as to withdrawal or use for other than current operations or are clearly designated for expenditure in the acquisition or construction of noncurrent assets or for the liquidation of long-term debts, are classified as long-term. Short-term Investments Short-term investments generally include certain deposits as well as securities that are considered highly liquid or provide for periodic reset of interest rates. Investments with original maturities greater than three months and equal to or less than a year, as well as investments with original maturities of greater than a year that management has the ability and intent to sell within a year, are included in "Other current assets" on the Balance Sheets. Investments in Debt and Equity Securities Investments in debt securities are classified as held-to-maturity and measured at amortized cost when there is an intent and ability to hold the securities to maturity. Debt and equity securities held principally to capitalize on fluctuations in their value with the intention of selling them in the near-term are classified as trading. All other investments in debt and equity securities are classified as available-for-sale. Both trading and available-for-sale securities are carried at fair value. The specific identification method is used to calculate realized gains and losses on debt and equity securities. Any unrealized gains and losses on trading securities are included in earnings. The criteria for determining whether a decline in fair value of a debt security is other than temporary and whether the other-than-temporary impairment is recognized in earnings or reported in OCI require that when a debt security is in an unrealized loss position and: • there is an intent or a requirement to sell the security before recovery, the other-than-temporary impairment is recognized currently in earnings; or • there is no intent or requirement to sell the security before recovery, the portion of the other-than-temporary impairment that is considered a credit loss, if any, is recognized currently in earnings and the remainder of the other-than-temporary impairment is reported in OCI, net of tax. Unrealized gains and losses on available-for-sale equity securities are reported, net of tax, in OCI. When an equity security's decline in fair value below cost is determined to be an other-than-temporary impairment, the unrealized loss is recognized currently in earnings. See Notes 14 and 19 for additional information on investments in debt and equity securities. Securities held by Talen Energy's NDT funds and auction rate securities are classified as available-for-sale. |
Property, Plant and Equipment | Property, Plant and Equipment PP&E is recorded at original cost, unless impaired. PP&E acquired in business combinations is recorded at fair value at the time of acquisition, which establishes its original cost. If impaired, the asset is written down to fair value at that time, which becomes the new cost basis of the asset. Original cost for constructed assets includes material, labor, contractor costs, certain overheads and financing costs, where applicable. The cost of repairs and minor replacements are charged to expense as incurred. Costs associated with planned major maintenance projects are recorded in the period in which the costs are incurred. No costs associated with planned major maintenance projects are accrued in advance of the period in which the work is performed. Nuclear fuel-related costs, including fuel, conversion, enrichment, fabrication and assemblies, are capitalized as PP&E. Such costs are amortized as the fuel is spent using the units-of-production method and included in "Fuel" on the Statements of Income. Talen Energy capitalizes interest costs as part of construction costs. Capitalized interest was as follows for the years ended December 31 . 2015 2014 2013 $ 20 $ 23 $ 37 Depreciation Depreciation is recorded over the estimated useful lives of property using primarily the straight-line, composite and group methods. When a component of PP&E that was depreciated under the composite or group method is retired, the original cost is charged to accumulated depreciation. When all or a significant portion of an operating unit that was depreciated under the composite or group method is retired or sold, the property and the related accumulated depreciation account is reduced and any gain or loss is included in income. The weighted-average rates of depreciation were 3.18% and 3.28% at December 31, 2015 and 2014 . |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents the excess of the purchase price paid over the fair value of the identifiable net assets acquired in a business combination. Other acquired intangible assets are initially measured based on their fair value. Intangibles that have finite useful lives are amortized over their useful lives based upon the pattern in which the economic benefits of the intangible assets are consumed or otherwise used. Costs incurred to obtain an initial license and renew or extend terms of licenses are capitalized as intangible assets. When determining the useful life of an intangible asset, including intangible assets that are renewed or extended, Talen Energy and its subsidiaries consider the expected use of the asset; the expected useful life of other assets to which the useful life of the intangible asset may relate; legal, regulatory, or contractual provisions that may limit the useful life; the company's historical experience as evidence of its ability to support renewal or extension; the effects of obsolescence, demand, competition, and other economic factors; and the level of maintenance expenditures required to obtain the expected future cash flows from the asset. Talen Energy accounts for emission allowances and RGGI emission credits (RGGI credits) as intangible assets. Talen Energy is allocated emission allowances by states based on its generation facilities' historical emissions experience, and has purchased emission allowances generally or RGGI credits when it is expected that additional allowances or RGGI credits will be needed. The carrying value of allocated emission allowances is initially recorded at zero value and purchased allowances and RGGI emissions credits are initially recorded based on their purchase price. When consumed or sold, emission allowances and RGGI credits are removed from the Balance Sheet at their weighted-average carrying value. Since the economic benefits of emission allowances and RGGI credits are not diminished until they are consumed, emission allowances and RGGI credits are not amortized; rather, they are expensed when consumed or a gain or loss is recognized when sold. Such expense is included in "Fuel" on the Statements of Income. Gains and losses on the sale of emission allowances and RGGI credits are included in "Operation and maintenance" on the Statements of Income. |
Asset Impairment (Excluding Investments) | Asset Impairment (Excluding Investments) Talen Energy reviews long-lived assets that are subject to depreciation or amortization, including finite-lived intangibles, for impairment when events or changes in circumstances indicate carrying amounts may not be recoverable. A long-lived asset classified as held and used is impaired when the carrying amount of the asset exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If impaired, the asset's carrying value is written down to its fair value. See Notes 14 and 16 for a discussion of an impairment of an asset classified as held and used. A long-lived asset classified as held for sale is impaired when the carrying amount of the asset (disposal group) exceeds its fair value less cost to sell. If impaired, the asset's (disposal group's) carrying value is written down to its fair value less cost to sell. See Notes 14 and 16 for a discussion of impairments of an asset group initially classified as held for sale at acquisition and subsequently reclassified as held and used. Talen Energy reviews goodwill for impairment at the reporting unit level annually or more frequently when events or circumstances indicate that the carrying amount of a reporting unit may be greater than the unit's fair value. Additionally, goodwill must be tested for impairment in circumstances when a portion of goodwill has been allocated to a business to be disposed. Talen Energy's reporting units are at the operating segment level. Talen Energy may elect either to initially make a qualitative evaluation about the likelihood of an impairment of goodwill or to bypass the qualitative evaluation and test goodwill for impairment using a two-step quantitative test. If the qualitative evaluation (referred to as "step zero") is elected and the assessment results in a determination that it is not more likely than not that the fair value of a reporting unit is less than the carrying amount, the two-step quantitative impairment test is not necessary. However, the quantitative impairment test is required if management concludes it is more likely than not that the fair value of a reporting unit is less than the carrying amount based on the step zero assessment. If the carrying amount of the reporting unit, including goodwill, exceeds its fair value, the implied fair value of goodwill must be calculated in the same manner as goodwill in a business combination. The fair value of a reporting unit is allocated to all assets and liabilities of that unit as if the reporting unit had been acquired in a business combination. The excess of the fair value of the reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill. If the implied fair value of goodwill is less than the carrying amount, goodwill is written down to its implied fair value. See Note 16 for information on a goodwill impairment recorded in the third quarter of 2015, which fully impaired Talen Energy's previously recognized goodwill. |
Asset Retirement Obligations | Asset Retirement Obligations Talen Energy records liabilities to reflect various legal obligations associated with the retirement of long-lived assets. Initially, this obligation is measured at fair value and offset with an increase in the value of the capitalized asset, which is depreciated over the asset's useful life. Until the obligation is settled, the liability is increased through the recognition of accretion expense classified within "Operation and maintenance" on the Statements of Income to reflect changes in the obligation due to the passage of time. Estimated ARO costs and settlement dates, which affect the carrying value of the ARO and the related capitalized asset, are reviewed periodically to ensure that any material changes are incorporated into the latest estimate of the ARO. Any change to the capitalized asset, positive or negative, is generally amortized over the remaining life of the associated long-lived asset. See Note 18 for additional information on AROs. |
Compensation and Benefits | Compensation and Benefits Defined Benefits Talen Energy Supply and certain of its subsidiaries sponsor or participate in, as applicable, various qualified funded and non-qualified unfunded defined benefit pension plans and both funded and unfunded other postretirement benefit plans. Prior to the June 1, 2015 spinoff, Talen Energy participated in plans sponsored by PPL. An asset or liability is recorded with an offsetting entry to AOCI to recognize the funded status of all defined benefit plans sponsored by Talen Energy Supply and its subsidiaries. Consequently, the funded status of all sponsored defined benefit plans is fully recognized on the Balance Sheets. The expected return on plan assets is determined based on a market-related value of plan assets, which is calculated by rolling forward the prior year market-related value with contributions, disbursements and long-term expected return on investments. One-fifth of the difference between the actual value and the expected value is added (or subtracted if negative) to the expected value to determine the new market-related value. Talen Energy uses an accelerated amortization method for the recognition of gains and losses for its defined benefit pension plans. Under the accelerated method, actuarial gains and losses in excess of 30% of the plan's projected benefit obligation are amortized on a straight-line basis over one-half of the expected average remaining service of active plan participants. Actuarial gains and losses in excess of 10% of the greater of the plan's projected benefit obligation or the market-related value of plan assets and less than 30% of the plan's projected benefit obligation are amortized on a straight-line basis over the expected average remaining service period of active plan participants. See Note 9 for additional information about the plans and the accounting for defined benefits, including a discussion of the newly created pension and other postretirement benefit plans sponsored by Talen Energy Supply that replaced Talen Energy Supply's participation in similar PPL plans effective with the June 1, 2015 spinoff. Stock-Based Compensation Talen Energy Corporation has stock-based compensation plans for purposes of granting stock options, restricted stock, restricted stock units and performance units to certain employees as well as stock units and restricted stock units to directors. Prior to the June 1, 2015 spinoff Talen Energy Supply participated in plans sponsored by PPL. Talen Energy recognizes compensation expense for stock-based awards based on the fair value method. Stock options that vest in installments are valued as a single award. Talen Energy Corporation grants stock options with an exercise price that is not less than the fair value of Talen Energy Corporation's common stock on the date of grant. All awards are recorded as equity or a liability on the Balance Sheets. Stock-based compensation is primarily included in "Operation and maintenance" on the Statements of Income. Stock-based compensation expense for periods prior to the June 1, 2015 spinoff also includes an allocation of PPL Services' expense. |
Income Taxes | Income Taxes Talen Energy Corporation and its subsidiaries file a consolidated U.S. federal income tax return. Significant management judgment is required in developing Talen Energy's provision for income taxes, primarily due to the uncertainty related to tax positions taken or expected to be taken in tax returns and valuation allowances that may be required to offset deferred tax assets. In order to determine the amount of benefit to be recognized in relation to an uncertain tax position, Talen Energy uses a two-step process to evaluate tax positions. The first step requires an entity to determine whether, based on the technical merits supporting a particular tax position, it is more likely than not (greater than a 50% chance) that the tax position will be sustained. This determination assumes that the relevant taxing authority will examine the tax position and is aware of all the relevant facts surrounding the tax position. The second step requires an entity to recognize in the financial statements the benefit of a tax position that meets the more-likely-than-not recognition criterion. The benefit recognized is measured at the largest amount of benefit that has a likelihood of realization, upon settlement, that exceeds 50%. The amounts ultimately paid upon resolution of issues raised by taxing authorities may differ materially from the amounts accrued and may materially impact the financial statements in future periods. Deferred income taxes reflect the net future tax effects of temporary differences between the carrying amounts of assets and liabilities for accounting purposes and their basis for income tax purposes, as well as the tax effects of net operating loss carryforwards and tax credit carryforwards. Talen Energy records valuation allowances to reduce deferred tax assets to the amounts that are more likely than not to be realized. Talen Energy considers the ability to carryback attributes, the reversal of temporary differences, future taxable income and ongoing prudent and feasible tax planning strategies in initially recording and subsequently reevaluating the need for valuation allowances. If Talen Energy determines that it is able to realize deferred tax assets in the future in excess of recorded net deferred tax assets, adjustments to the valuation allowances increase income by reducing tax expense in the period that such determination is made. Likewise, if Talen Energy determines that it is not able to realize all or part of net deferred tax assets in the future, adjustments to the valuation allowances would decrease income by increasing tax expense in the period that such determination is made. Talen Energy defers investment tax credits when the credits are utilized and amortizes the deferred amounts over the average lives of the related assets. Talen Energy classifies interest and penalties from tax uncertainties in "Income Taxes" on its Statements of Income. Talen Energy records the receipt of grants related to assets as a reduction to the book basis of the property and the related deferred income taxes as an immediate reduction to income tax expense. The income tax provision for Talen Energy Supply is calculated in accordance with an intercompany tax sharing agreement which provides that taxable income be calculated as if Talen Energy Supply and any subsidiaries each filed a separate consolidated return. Tax benefits are not shared between companies. The entity that generates a tax benefit is the entity that is entitled to the tax benefit. The effect of Talen Energy Corporation filing a consolidated tax return is taken into account in the settlement of current taxes and the recognition of deferred taxes. Prior to the spinoff, the income tax provision for Talen Energy Supply was calculated in accordance with an intercompany tax sharing agreement with PPL, which provided that taxable income be calculated as if Talen Energy Supply, and any of PPL's domestic subsidiaries, each filed a separate consolidated return. Tax benefits were not shared between companies. The entity that generated a tax benefit was the entity that was entitled to the tax benefit. |
Taxes, Other Than Income | Taxes, Other Than Income Talen Energy presents sales taxes in "Other current liabilities." These taxes are not reflected on the Statements of Income. See Note 4 for details on taxes included in "Taxes, other than income" on the Statements of Income. |
Leases | Leases Talen Energy evaluates whether arrangements entered into contain leases for accounting purposes. See Note 7 for a discussion of arrangements under which Talen Energy is a lessee for accounting purposes. |
Fuel, Materials and Supplies | Fuel, Materials and Supplies Fuel, materials and supplies are valued at the lower of cost or market using the average cost method. Generally, cost is reduced to market if the value of inventory has declined and it is probable that the utility of inventory in the ordinary course of business will not be recovered through revenue earned. Fuel costs for electric generation are charged to expense as used. Materials and supplies are charged to "Operation and maintenance" on the Statements of Income as they are used for repairs and maintenance or capitalized to PP&E as they are used for capital projects. |
Guarantees | Guarantees Generally, the initial measurement of a guarantee liability is the fair value of the guarantee at its inception. However, there are certain guarantees excluded from the scope of accounting guidance and other guarantees that are not subject to the initial recognition and measurement provisions of accounting guidance that only require disclosure. See Note 11 for further discussion of recorded and unrecorded guarantees. |
New Accounting Guidance Adopted | New Accounting Guidance Adopted Reporting of Discontinued Operations Effective January 1, 2015, Talen Energy prospectively adopted accounting guidance that changes the criteria for determining what should be classified as a discontinued operation and the related presentation and disclosure requirements. A discontinued operation may include a component of an entity or a group of components of an entity, or a business activity. A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on the entity's operations and financial results when any of the following occurs: (1) the components of an entity or a group of components of an entity meets the criteria to be classified as held for sale, (2) the component of an entity or a group of components of an entity is disposed of by sale, or (3) the component of an entity or a group of components of an entity is disposed of other than by sale (for example, by abandonment or in a distribution to owners in a spinoff). In addition, the guidance provides that upon acquisition, if a business or activity meets the held for sale criteria, it is then also to be classified as a discontinued operation. The initial adoption of this guidance did not have a significant impact on Talen Energy but will impact the amounts presented as discontinued operations and will enhance the related disclosure requirements related to future disposals or held for sale classifications. Accounting for Measurement-Period Adjustments Effective September 30, 2015, Talen Energy prospectively adopted accounting guidance that requires an acquirer in a business combination to recognize measurement-period adjustments in the period in which the amounts are determined, including the effect on earnings of any amounts that would have been recorded in prior periods as if the accounting would have been completed at the acquisition date. The acquirer must disclose, by line item, the portion of the adjustment recorded in the current period income statement that would have been recognized in prior periods if the adjustment had been recognized as of the acquisition date. The guidance applies to open measurement periods as of the adoption date and therefore applies to any measurement period adjustment made for the acquisitions of RJS Power and MACH Gen. See Note 6 for additional information. Balance Sheet Classification of Deferred Taxes Effective December 31, 2015, Talen Energy prospectively adopted accounting guidance that requires deferred tax liabilities and assets to be classified as noncurrent in the balance sheet. The prior period amounts were not retrospectively adjusted. The current requirement that deferred tax assets and liabilities of a tax-paying component of an entity be offset and presented as a single amount is not affected by the guidance. Accounting for Revenue from Contracts with Customers In May 2014, the FASB issued accounting guidance that establishes a comprehensive new model for the recognition of revenue from contracts with customers. This model is based on the core principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance can be applied using either a full retrospective or modified retrospective transition method. In August 2015, the FASB issued guidance that defers the effective date of the standard by one year, which for public business entities, results in initial application of this guidance in annual reporting periods beginning after December 15, 2017 and interim periods within those years. Entities may early adopt the guidance as of the original effective date of the standard, which for public business entities is annual reporting periods beginning after December 15, 2016. Talen Energy expects to adopt this guidance effective January 1, 2018. Talen Energy is currently assessing the impact of adopting this guidance, as well as the transition method it will use. Reporting Uncertainties about an Entity's Ability to Continue as a Going Concern In August 2014, the FASB issued accounting guidance which will require management to assess, for each interim and annual period, whether there are conditions or events that raise substantial doubt about an entity's ability to continue as a going concern. Substantial doubt about an entity's ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date the financial statements are issued. When management identifies conditions or events that raise substantial doubt about an entity's ability to continue as a going concern, management is required to disclose information that enables users of the financial statements to understand the principal conditions or events that raised substantial doubt about the entity's ability to continue as a going concern and management's evaluation of the significance of those conditions or events. If substantial doubt about the entity's ability to continue as a going concern has been alleviated as a result of management's plan, the entity should disclose information that allows the users of the financial statements to understand those plans. If the substantial doubt about the entity's ability to continue as a going concern is not alleviated by management's plans, management's plans to mitigate the conditions or events that gave rise to the substantial doubt about the entity's ability to continue as a going concern should be disclosed, as well as a statement that there is substantial doubt the entity's ability to continue as a going concern within one year after the date the financial statements are issued. For all entities, this guidance should be applied prospectively within the annual periods ending after December 15, 2016, and for annual periods and interim periods thereafter. Early adoption is permitted. Talen Energy will adopt this guidance for the annual period ending December 31, 2016. The adoption of this guidance is not expected to have a significant impact. Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity In November 2014, the FASB issued guidance that clarifies how current accounting guidance should be interpreted when evaluating the economic characteristics and risks of a host contract of a hybrid financial instrument issued in the form of a share. This guidance does not change the current criteria for determining whether separation of an embedded derivative feature from a hybrid financial instrument is required. Entities are still required to evaluate whether the economic risks of the embedded derivative feature are clearly and closely related to those of the host contract, among other relevant criteria. An entity should consider the substantive terms and features of the entire hybrid financial instrument, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of the host contract to determine whether the host contract is more akin to a debt instrument or more akin to an equity instrument. An entity should assess the relative strength of the debt-like and equity-like terms and features when determining how to weight those terms and features. For public business entities, this guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 and should be applied using a modified retrospective method for existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year the guidance is adopted. Early adoption is permitted. Retrospective application is permitted but not required. Talen Energy will adopt this guidance effective January 1, 2016. The adoption of this guidance is not expected to have a significant impact. Simplifying the Presentation of Debt Issuance Costs In April 2015, the FASB issued accounting guidance to simplify the presentation of debt issuance costs by requiring debt issuance costs to be presented on the balance sheet as a direct deduction from the carrying amount of the associated debt liability, consistent with the presentation of debt discounts. Because this guidance did not address the treatment of debt issuance costs related to line-of-credit arrangements, additional guidance was issued in August 2015 stating that an entity may defer and amortize debt issuance costs over the term of a line-of-credit arrangement, regardless of whether there are any related outstanding borrowings. For public business entities, this guidance should be applied retrospectively for financial statements issued for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. Early adoption is permitted. Talen Energy will adopt this guidance effective January 1, 2016. The adoption of this guidance will require Talen Energy to reclassify debt issuance costs from assets to long-term debt, and is not expected to have a significant impact. Recognition of Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued accounting guidance that affects the accounting for equity investments, financial liabilities under the fair value option, and the disclosure requirements for financial instruments. This guidance generally requires entities to measure equity investments that are not accounted for under the equity method of accounting and do not result in consolidation at fair value and recognize any changes in fair value in net income. Entities may elect to record equity investments without readily determinable fair values at cost, less impairment, adjusted for observable price changes. The impairment model for equity investments subject to this election is a single-step qualitative assessment performed each quarter. For financial liabilities measured using the fair value option, changes in fair value related to instrument-specific credit risk to be presented separately within OCI. For public business entities, this guidance should generally be applied prospectively for financial statements issued for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is generally not permitted, although entities may early adopt the provision related to financial liabilities under the fair value option. Talen Energy expects to adopt this guidance effective January 1, 2018. Upon adoption, an entity will record a cumulative-effect adjustment to beginning retained earnings as of the beginning of the first reporting period in which the guidance is adopted, with the exception that the amendments related to equity securities with readily determined fair values should be applied prospectively. Talen Energy is currently assessing the impact of adopting this guidance, which may be significant for equity securities held in the NDT funds. Accounting for Leases In February 2016, the FASB issued accounting guidance that updates the accounting for leases. The updated guidance will require lessees to recognize assets and liabilities for the rights and obligations created by their leases with lease terms of more than 12 months. Consistent with current accounting guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance (similar to the current capital lease) or an operating lease. However, unlike current accounting guidance, which requires only capital leases to be recognized on the balance sheet, the new accounting guidance will require both types of leases to be recognized on the balance sheet. The new accounting guidance also will require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements. The accounting by lessors will remain largely unchanged. However, the new accounting guidance contains some targeted improvements that are intended to align, where necessary, lessor accounting with the lessee accounting model and with the updated revenue recognition guidance issued in 2014 and discussed above. For public business entities, this guidance is effective for annual reporting periods beginning after December 15, 2018 and interim periods within those years. Early application is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. An entity that elects to apply the practical expedients will, in effect, continue to account for leases that commence before the effective date in accordance with previous accounting guidance unless the lease is modified, except that lessees are required to recognize a right-of-use asset and a lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous accounting guidance. Talen Energy is currently assessing the impact of adopting this guidance and expects to adopt this guidance effective January 1, 2019. |
Interest expense allocated to discontinued operations | Following are the components of discontinued operations in the Statement of Income for the years ended December 31 . 2014 2013 Operating revenues $ 117 $ 139 Gain on the sale (pre-tax) 306 — Interest expense (a) 9 12 Income (loss) before income taxes 332 49 Income (Loss) from Discontinued Operations (net of income taxes) 223 32 (a) Represents allocated interest expense based upon the discontinued operations share of the net assets of Talen Energy. |
Fair Value Transfer | Transfers between levels are recognized at end-of-reporting-period values. |
Master Netting Arrangements | Net derivative positions on the balance sheets are not offset against the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) under master netting arrangements. |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Changes in the allowance for doubtful accounts | The changes in the allowance for doubtful accounts were: Additions Balance at Beginning of Period Charged to Income Charged to Other Accounts Deductions (a) Balance at End of Period 2015 $ 2 $ — $ — $ 1 $ 1 2014 21 — — 19 (b) 2 2013 23 1 — 3 21 (a) Primarily related to uncollectible accounts written off. (b) In 2011, a wholesale customer filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy code. In 2014, Talen Energy Marketing received an insignificant amount of cash, settling the outstanding administrative claim and therefore, the related reserve balance was offset against the accounts receivable balance. |
Balances of restricted cash and cash equivalents | At December 31, the balances of restricted cash and cash equivalents included the following. 2015 2014 Margin deposits posted to counterparties $ 91 $ 175 Ironwood debt service reserves 15 17 Other — 1 $ 106 $ 193 |
Capitalized interest costs | Talen Energy capitalizes interest costs as part of construction costs. Capitalized interest was as follows for the years ended December 31 . 2015 2014 2013 $ 20 $ 23 $ 37 |
Schedule of utility inventory | "Fuel, materials and supplies" on the Balance Sheets consisted of the following at December 31 . 2015 2014 Fuel $ 257 $ 250 Materials and supplies 251 205 Total $ 508 $ 455 |
Segment and Related Informati34
Segment and Related Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Reconciliation of Segments to Consolidated | Financial data for the segments and reconciliation to consolidated results for the years ended December 31 are: East West Other Total 2015 Revenues from external customers by product Energy $ 3,653 $ 284 $ — $ 3,937 Energy-related business 544 — — 544 Total Revenues $ 4,197 $ 284 $ — $ 4,481 Operating income (loss) (a) $ 198 $ 2 $ (239 ) $ (39 ) Depreciation 327 26 3 356 Amortization (b) 200 1 21 222 Unrealized (gains) losses on derivatives and other hedging activities (c) (143 ) 24 — (119 ) Impairments (d) 657 — — 657 Expenditures for long-lived assets (e) 387 39 38 464 Total assets (f) 11,430 1,231 165 12,826 2014 Revenues from external customers by product Energy $ 3,771 $ 209 $ — $ 3,980 Energy-related business 601 — — 601 Total Revenues $ 4,372 $ 209 $ — $ 4,581 Operating income (loss) $ 558 $ 71 $ (232 ) $ 397 Depreciation 296 1 — 297 Amortization (b) 154 — 9 163 Unrealized (gains) losses on derivatives and other hedging activities (c) 35 (31 ) — 4 Expenditures for long-lived assets 400 31 — 431 Total assets (f) 10,308 160 292 10,760 2013 Revenues from external customers by product Energy $ 3,791 $ 177 $ — $ 3,968 Energy-related business 527 — — 527 Total Revenues $ 4,318 $ 177 $ — $ 4,495 Operating income (loss) (a) $ 652 $ (750 ) $ (195 ) $ (293 ) Depreciation 288 11 — 299 Amortization (b) 149 — 7 156 Unrealized (gains) losses on derivatives and other hedging activities (c) 163 8 — 171 Impairments (d) — 65 — 65 Expenditures for long-lived assets 537 31 — 568 (a) In 2015, the East segment includes impairment charges of $657 million related to goodwill and other asset impairments. See Notes 14 and 16 for additional information. In 2013, the West segment includes a charge of $697 million for the termination of the lease of the Colstrip plant and a $65 million impairment charge related to the Corette plant. See Notes 6 and 14 for additional information. (b) Represents non-cash items that include the amortization of nuclear fuel, debt discounts and premiums, debt issuance costs, emission allowances and RECs. (c) See Note 15 for additional information. (d) See Notes 14 and 16 for additional information. (e) Does not include expenditures for business acquisitions. (f) Other primarily consists of unallocated items, including cash and PP&E. |
Earnings (Loss) Per Share for35
Earnings (Loss) Per Share for Talen Energy Corporation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Basic and Diluted EPS Computations | Reconciliations of the amounts of income and shares of Talen Energy Corporation common stock (in thousands) for the years ended December 31 used in the EPS calculation are: 2015 2014 2013 Income (Numerator) Attributable to Talen Energy Corporation Stockholders Income (Loss) from continuing operations after income taxes $ (341 ) $ 187 $ (262 ) Income (Loss) from discontinued operations (net of income taxes) — 223 32 Net Income (Loss) $ (341 ) $ 410 $ (230 ) Shares of Common Stock (Denominator) Weighted-average shares - Basic EPS 109,898 83,524 83,524 Weighted-average shares - Diluted EPS 109,898 83,524 83,524 |
Income and Other Taxes (Tables)
Income and Other Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Expense (Benefit) from Continuing Operations | Details of the components of income tax expense, a reconciliation of federal income taxes derived from statutory tax rates applied to "Income (Loss) from Continuing Operations Before Income Taxes" to income taxes for reporting purposes, and details of "Taxes, other than income" were as follows: 2015 2014 2013 Income Tax Expense (Benefit) Current - Federal $ 43 $ 28 $ 118 Current - State — 13 16 Total Current Expense 43 41 134 Deferred - Federal (22 ) 66 (263 ) Deferred - State (37 ) 11 (27 ) Total Deferred Expense (Benefit) (59 ) 77 (290 ) Investment tax credit, net - federal (11 ) (2 ) (3 ) Total income taxes (benefits) from continuing operations (a) $ (27 ) $ 116 $ (159 ) Total income tax expense (benefit) - Federal $ 10 $ 92 $ (148 ) Total income tax expense (benefit) - State (37 ) 24 (11 ) Total income taxes (benefits) from continuing operations (a) $ (27 ) $ 116 $ (159 ) (a) Excludes current and deferred federal and state tax expense recorded to Discontinued Operations of $109 million and $17 million in 2014 and 2013 . Also excludes federal and state tax expense (benefit) recorded to OCI of $(1) million , $(56) million and $47 million in 2015 , 2014 and 2013 . |
Reconciliation of Income Tax Expense Derived From Statutory Tax Rate | Details of the components of income tax expense, a reconciliation of federal income taxes derived from statutory tax rates applied to "Income (Loss) from Continuing Operations Before Income Taxes" to income taxes for reporting purposes, and details of "Taxes, other than income" were as follows: 2015 2014 2013 Reconciliation of Income Tax Expense Federal income tax on Income from Continuing Operations Before Income Taxes at statutory tax rate - 35% $ (129 ) $ 106 $ (147 ) Increase (decrease) due to: State income taxes, net of federal income tax benefit (3 ) 17 (24 ) Federal and state tax reserve adjustments (a) (12 ) — — Federal income tax credits (b) (9 ) — (8 ) State deferred tax rate change, net of federal benefit (c) (17 ) (1 ) 15 Federal and state income tax return adjustments (7 ) — — Goodwill Impairment (d) 144 — — Other 6 (6 ) 5 Total increase (decrease) 102 10 (12 ) Total income taxes $ (27 ) $ 116 $ (159 ) Effective income tax rate 7.4 % 38.3 % 37.9 % (a) In 2015, open audits for the tax years 2008-2011 were settled by PPL with the IRS resulting in a tax benefit of $12 million for Talen Energy's portion of the settlement of previously unrecognized tax benefits. (b) During 2015, Talen Energy recorded a benefit primarily related to the recognition of previously unamortized tax credits as a result of the sale of Talen Renewable Energy in November 2015. During 2013, Talen Energy recorded deferred tax benefits related to investment tax credits on progress expenditures for the Holtwood hydroelectric plant expansion. See Note 6 for additional information. (c) During 2015 , 2014 and 2013 , Talen Energy recorded adjustments related to its December 31 state deferred tax liabilities as a result of annual changes in state apportionment and the impact on the future estimated state income tax rate. (d) A significant portion of the impairment was related to non-deductible goodwill. See Note 16 for additional information on the goodwill impairment. |
Details of Taxes, Other than Income | Details of the components of income tax expense, a reconciliation of federal income taxes derived from statutory tax rates applied to "Income (Loss) from Continuing Operations Before Income Taxes" to income taxes for reporting purposes, and details of "Taxes, other than income" were as follows: 2015 2014 2013 Taxes, other than income State gross receipts $ 41 $ 45 $ 37 State capital stock 1 1 1 Property and other 23 11 15 Total $ 65 $ 57 $ 53 |
Components of Deferred Tax Assets and Liabilities | At December 31 , significant components of Talen Energy's deferred income tax assets and liabilities were as follows 2015 2014 Deferred Tax Assets Deferred investment tax credits $ 6 $ 11 Accrued pension costs 121 98 Federal net operating loss carryforwards 110 22 Federal tax credit carryforwards — 13 State net operating loss carryforwards 19 79 Other 105 79 Valuation allowances (10 ) (78 ) Total deferred tax assets 351 224 Deferred Tax Liabilities Plant - net 1,874 1,374 Unrealized gain on qualifying derivatives 53 28 Other 10 42 Total deferred tax liabilities 1,937 1,444 Net deferred tax liability $ 1,586 $ 1,220 |
Summary of Operating Loss and Tax Credit Carryforwards | At December 31 , Talen Energy had the following federal and state net operating loss carryforwards. 2015 Expiration Loss carryforwards Federal net operating losses (a) (b) $ 314 2028-2034 State net operating losses (a) (b) 274 2016-2035 (a) The federal and state net operating loss carryforwards presented above are net of unrecognized tax benefits recorded for deferred tax assets. (b) A portion of the net operating loss carryforwards consist of tax losses obtained as a result of the acquisition of MACH Gen. The utilization of these carryforwards are subject to annual limitations imposed by Section 382 of the Internal Revenue Code, which limits a company’s ability to deduct prior net operating losses following a more than 50 percent change in ownership. The Section 382 limitation is not expected to prevent Talen Energy from utilizing its federal loss carryforwards in future years. State net operating loss carryforwards are also dependent upon state taxable income or loss, the state’s proportion of taxable net income and the application of state laws, which can change from year to year and impact the amount of such carryforward utilization. |
Schedule of Valuation Allowance | Valuation allowances have been established for the amount that, more likely than not, will not be realized. The changes in deferred tax valuation allowances were as follows: Additions Balance at Beginning of Period Charged to Income Charged to Other Accounts (a) Reductions Balance at End of Period 2015 $ 78 $ — $ (68 ) $ — $ 10 2014 78 — — — 78 2013 74 4 — — 78 (a) 2015 decreased by $78 million for valuation allowances against deferred tax assets retained by PPL upon spinoff and increased by $10 million for valuation allowances established against deferred tax assets acquired in the MACH Gen acquisition in November 2015. |
Unrecognized Tax Benefits | The following interest expense (benefit) was recognized in income taxes for the years ended December 31 . 2015 2014 2013 $ — $ (1 ) $ 5 Changes to unrecognized tax benefits were as follows: 2015 2014 Beginning of period $ 15 $ 15 Increases based on tax positions of prior years (a) 31 — Decreases relating to settlements with taxing authorities (b) (15 ) — End of period $ 31 $ 15 (a) Increased unrecognized tax benefits were established to offset the deferred tax asset related to net operating loss carryforwards as a result of the MACH Gen acquisition in November 2015. (b) Decreased as a result of IRS audit settlements for tax years 1998-2011 during the year ended December 31, 2015. |
Summary of Income Tax Examinations | With few exceptions, at December 31, 2015 , the tax years in these jurisdictions that remain subject to examination are: U.S. (federal) 2009 - present Pennsylvania (state) 2012 - present |
Financing Activities (Tables)
Financing Activities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Line of Credit Facilities | The following secured revolving credit facilities were in place at December 31, 2015 : Expiration Date Capacity Borrowed (c) Letters of Unused Capacity Talen Energy Supply RCF (a) June 2020 $ 1,850 $ 500 $ 163 $ 1,187 New MACH Gen RCF (b) July 2021 160 108 31 21 Total Credit Facilities $ 2,010 $ 608 $ 194 $ 1,208 (a) The facility is syndicated and provides capacity available for short-term borrowings and up to $925 million of letters of credit. The facility requires Talen Energy Supply to maintain a senior secured net debt to adjusted EBITDA ratio (as defined in the agreement) of less than or equal to 4.50 to 1.00 as of the last day of any fiscal quarter. Talen Energy Supply pays customary fees on the facility and borrowings bear interest at its option at either a defined base rate or LIBOR-based rates, in each case plus an applicable margin. The weighted average interest rate on outstanding borrowings at December 31, 2015 was 2.67% . (b) The facility provides capacity available for short-term borrowings and up to $120 million of letters of credit. New MACH Gen pays customary fees on the facility and borrowings bear interest at 12-month LIBOR, plus an applicable margin. The weighted average interest rate on outstanding borrowings at December 31, 2015 was 5.04% . (c) The amounts borrowed are recorded as "Short-term debt" on the Balance Sheet. |
Schedule of Long-term Debt | The following long-term debt was outstanding at December 31: 2015 2014 Weighted-Average Rate Maturities Senior Unsecured Notes 5.41 % 2016-2038 $ 3,713 $ 2,193 Senior Secured Notes 8.86 % 2025 41 45 Term Loan B 6.21 % 2022 474 — Total Long-term Debt Before Adjustments 4,228 2,238 Fair market value adjustments (23 ) (19 ) Unamortized premium and (discount), net (2 ) (1 ) Total Long-term Debt 4,203 2,218 Less current portion of Long-term Debt, including fair market value adjustment 399 535 Total Long-term Debt, noncurrent $ 3,804 $ 1,683 |
Schedule of Maturities of Long-term Debt | The aggregate maturities of long-term debt are as follows: 2016 2017 2018 2019 2020 Thereafter Total $ 396 $ 5 $ 424 $ 1,244 $ 179 $ 1,980 $ 4,228 |
Acquisitions, Development and38
Acquisitions, Development and Divestitures (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Acquisitions Development And Divestitures [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The MACH Gen acquisition was accounted for as a business combination, with the identifiable tangible and intangible assets and liabilities of MACH Gen, recorded at their estimated fair values on the acquisition date. The acquisition is consistent with management's strategy of business growth, fuel type diversity and replacing the assets being divested as part of the FERC approval of the RJS Power acquisition. The following table summarizes the allocation of the purchase price to the fair values of the major classes of assets and liabilities of MACH Gen. Current assets (a) $ 31 Intangible assets 3 PP&E 1,275 Short-term debt (103 ) Current liabilities (28 ) Long-term debt (470 ) Deferred income taxes (108 ) Total purchase price $ 600 (a) Includes gross contractual amounts of accounts receivable acquired of $9 million , which approximates fair value. The following table summarizes the allocation of the purchase price to the fair values of the major classes of assets and liabilities of RJS, all of which represent non-cash activity excluded from the Statement of Cash Flows for the year ended December 31, 2015 . The purchase price allocation is considered by Talen Energy's management to be final as of December 31, 2015. Current assets (a) $ 168 Assets of discontinued operations (b) 375 PP&E 1,777 Other intangibles 46 Short-term debt (36 ) Current liabilities (224 ) Liabilities of discontinued operations (5 ) Long-term debt (1,244 ) Deferred income taxes (266 ) Other noncurrent liabilities (c) (82 ) Net identifiable assets acquired 509 Goodwill (d) 393 Net assets acquired $ 902 (a) Includes gross contractual amount of the accounts receivable acquired of $41 million , which approximates fair value. (b) See Note 14 for information on impairment charges recorded during 2015 related to the Sapphire plants initial classification as assets held for sale and discontinued operations. See Note 1 for additional information on the subsequent reclassification to assets held and used. (c) Includes $33 million of "out-of-the-money" coal contracts that will be amortized over the life of the contracts terms as the coal is consumed. (d) The allocation above is as of the acquisition date of June 1, 2015. As further discussed in Note 16 , goodwill was fully impaired during 2015, which included the goodwill recognized in the acquisition of RJS Power. |
Pro Forma Information | Actual operating revenues and net income of RJS, since the June 1 acquisition, included in Talen Energy's results for the year ended December 31, 2015 were: Operating Revenues Net Income (Loss) (a) $ 528 $ (74 ) (a) Includes certain asset impairments and excludes the impact of the goodwill impairment recorded in 2015 subsequent to the acquisition. See Notes 14 and 16 for information on the impairments recorded. Pro Forma Information for RJS Power and MACH Gen Acquisitions Pro forma information (unaudited) for Talen Energy for the year ended December 31, as if both the RJS Power and MACH Gen acquisitions had occurred January 1, 2014, is as follows: Operating Revenues Income (Loss) After Tax from Continuing Operations 2015: Pro forma $ 5,109 $ (396 ) Basic and diluted earnings per share (for Talen Energy Corporation) (3.08 ) 2014: Pro forma 6,031 345 Basic and diluted earnings per share (for Talen Energy Corporation) 2.68 Actual operating revenues and net income of MACH Gen, since the November 2, 2015 acquisition, included in Talen Energy's results for the year ended December 31, 2015 were: Operating Revenues Net Income (Loss) $ 28 $ (9 ) |
Schedule of Components of Discontinued Operations | Following are the components of discontinued operations in the Statement of Income for the years ended December 31 . 2014 2013 Operating revenues $ 117 $ 139 Gain on the sale (pre-tax) 306 — Interest expense (a) 9 12 Income (loss) before income taxes 332 49 Income (Loss) from Discontinued Operations (net of income taxes) 223 32 (a) Represents allocated interest expense based upon the discontinued operations share of the net assets of Talen Energy. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Leases [Abstract] | |
Schedule of Rent Expense | Rent expense for the years ended December 31 for operating leases was as follows: 2015 2014 2013 $ 14 $ 29 $ 55 |
Schedule of Total Future Minimum Rental Payments for Operating Leases | Total future minimum rental payments for all operating leases are estimated to be: 2016 2017 2018 2019 2020 Thereafter Total $ 19 $ 18 $ 8 $ 5 $ 5 $ 26 $ 81 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Assumptions | The assumptions used in the model were: Risk-free interest rate 2.05 % Expected option life 6.00 years Expected stock volatility 21.55 % |
Retirement and Postemployment41
Retirement and Postemployment Benefits (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Net Periodic Defined Benefit Costs (Credit) | The following table provides the components of net periodic defined benefit costs for Talen Energy pension and other postretirement plans for the years ended December 31 , for which the 2015 periods include seven months of costs under the newly formed Talen Energy plans and a full year of Talen Montana plans. Pension Benefits Other Postretirement Benefits 2015 2014 2013 2015 2014 2013 Net periodic defined benefit costs (credits): Service cost $ 31 $ 5 $ 7 $ 2 $ — $ 1 Interest cost 46 9 8 2 1 — Expected return on plan assets (60 ) (11 ) (10 ) (3 ) — — Amortization of: Actuarial (gain) loss 16 2 3 — — — Curtailment charges (credits) — — — — (1 ) — Net periodic defined benefit costs (credits) $ 33 $ 5 $ 8 $ 1 $ — $ 1 Pension Benefits Other Postretirement Benefits 2015 2014 2013 2015 2014 2013 Other changes in plan assets and benefit obligations recognized in OCI: Curtailments $ — $ — $ — $ — $ 1 $ — Net (gain) loss 54 26 (15 ) — (1 ) (1 ) Prior service cost (credit) 3 — — — — (3 ) Amortization of: Actuarial gain (loss) (16 ) (2 ) (3 ) — — — Prior service credit (cost) — — — 1 — — Total recognized in OCI 41 24 (18 ) 1 — (4 ) Total recognized in net periodic defined benefit costs and OCI $ 74 $ 29 $ (10 ) $ 2 $ — $ (3 ) |
Schedule of Net Periodic Defined Benefit Costs Included in Income Statement | The following net periodic defined benefit costs (credits) were charged to operating expense, excluding amounts charged to construction and other non-expense accounts. Pension Benefits Other Postretirement Benefits 2015 2014 2013 2015 2014 2013 $ 48 $ 39 $ 45 $ 2 $ 3 $ 6 In the table above, amounts include costs for the specific plans sponsored by Talen Energy and its subsidiaries and the following allocated costs of the PPL pension and other postretirement benefit plans prior to the spinoff, based on Talen Energy Supply's participation in those plans, which management believes were reasonable at the time: Pension Benefits Other Postretirement Benefits 2015 2014 2013 2015 2014 2013 $ 16 $ 34 $ 38 $ — $ 3 $ 5 |
Defined Benefit Plan Assumptions and Impact of One Point Change on Postretirement Plans | The following weighted-average assumptions were used in the valuation of the benefit obligations at December 31 . Pension Benefits Other Postretirement Benefits 2015 2014 2015 2014 Discount rate 4.65 % 4.28 % 4.60 % 3.81 % Rate of compensation increase 3.98 % 4.03 % 3.98 % 4.03 % The following weighted-average assumptions were used to determine the net periodic defined benefit costs for Talen Energy's plans for the years ended December 31 . Pension Benefits Other Postretirement Benefits 2015 2014 2013 2015 2014 2013 Discount rate 4.41 % 5.18 % 4.25 % 4.27 % 4.51 % 3.77 % Rate of compensation increase 3.99 % 3.94 % 3.95 % 3.99 % 3.94 % 3.95 % Expected return on plan assets (a) 7.00 % 7.00 % 7.00 % 6.37 % N/A N/A (a) The expected long-term rates of return for pension and other postretirement benefits are based on management's projections using a best-estimate of expected returns, volatilities and correlations for each asset class. Each plan's specific current and expected asset allocations are also considered in developing a reasonable return assumption. The following table provides the assumed health care cost trend rates for the years ended December 31 . 2015 2014 2013 Health care cost trend rate assumed for next year obligations 6.80 % 7.20 % 7.60 % costs 7.20 % 7.60 % 8.00 % Rate to which the cost trend rate is assumed to decline (the ultimate trend) obligations 5.00 % 5.00 % 5.00 % costs 5.00 % 5.00 % 5.50 % Year that the rate reaches the ultimate trend rate obligations 2020 2020 2020 costs 2020 2020 2019 A one percentage point change in the assumed health care costs trend rate assumption would have been insignificant to the other postretirement benefit plans in 2015 . |
Schedule of Funded Status of Defined Benefit Plans | The funded status of Talen Energy's plans at December 31 was as follows: Pension Benefits Other Postretirement Benefits 2015 2014 2015 2014 Change in Benefit Obligation Benefit obligation, beginning of period $ 210 $ 163 $ 10 $ 12 Transfer of benefit obligation at spinoff (a) 1,416 — 80 — Service cost 31 5 2 — Interest cost 46 9 2 1 Plan amendments 3 — — — Actuarial (gain) loss (41 ) 38 (4 ) (1 ) Net Transfers in (out) — — (3 ) — Curtailments — — — (1 ) Gross benefits paid (51 ) (5 ) — (1 ) Benefit obligation, end of period $ 1,614 $ 210 $ 87 $ 10 Change in Plan Assets Plan assets at fair value, beginning of period $ 170 $ 147 $ — $ — Transfer of plan assets at fair value at spinoff (a) 1,159 — 80 — Actual return on plan assets (35 ) 22 (2 ) — Employer contributions 32 6 1 1 Gross benefits paid (52 ) (5 ) (1 ) (1 ) Plan assets at fair value, end of period 1,274 170 78 — Funded status end of period $ (340 ) $ (40 ) $ (9 ) $ (10 ) Amounts recognized in the Balance Sheets consist of: Current Liability $ — $ — $ — $ (1 ) Noncurrent liability (340 ) (40 ) (9 ) (9 ) Net amount recognized, end of period $ (340 ) $ (40 ) $ (9 ) $ (10 ) Amounts recognized in AOCI (pre-tax) consist of: Prior service cost (credit) $ 2 $ — $ (5 ) $ (4 ) Net actuarial (gain) loss 451 59 8 — Total $ 453 $ 59 $ 3 $ (4 ) Total accumulated benefit obligation for defined benefit pension plans $ 1,500 $ 210 (a) Values determined as of the spinoff date as discussed above. Allocations to Talen Energy Supply resulted in liabilities at December 31, 2014 as follows: Pension plans $ 259 Other postretirement benefit plans 34 |
Contributions Made to Multiemployer Plans | The table below details total contributions to all multiemployer pension and other postretirement plans, including the plan identified as significant above. The contribution amounts fluctuate each year based on the volume of work and type of projects undertaken from year to year. 2015 2014 2013 Pension plans $ 34 $ 40 $ 36 Other postretirement benefit plans 26 33 32 Total contributions $ 60 $ 73 $ 68 |
Schedule of Asset Allocation | The asset allocation for the VEBA trusts and the target allocation, by asset class, at December 31 are detailed below. Percentage of plan assets Target Asset Allocation 2015 2015 Asset Class U.S. Equity securities 53 % 45 % Debt securities 46 % 50 % Cash and cash equivalents 1 % 5 % Total 100 % 100 % The asset allocation for the trust and the target allocation prescribed by the investment guidelines by portfolio at December 31 are as follows: Percentage of trust assets Target Asset Allocation 2015 2015 Growth Portfolio 52 % 55 % Equity securities 24 % Debt securities (a) 14 % Alternative investments 14 % Immunizing Portfolio 46 % 44 % Debt securities (a) 40 % Derivatives 6 % Liquidity Portfolio 2 % 1 % Total 100 % 100 % (a) Includes commingled debt funds, which Talen Energy treats as debt securities for asset allocation purposes. |
Schedule of Fair Value of Net Assets by Asset Class | The fair value of assets in the other postretirement benefit plans by asset class and level within the fair value hierarchy was: December 31, 2015 Fair Value Measurement Using Total Level 1 Level 2 Level 3 U.S. Equity securities: Large-cap $ 26 $ — $ 26 $ — Commingled debt 23 — 23 — Total VEBA trust assets, at fair value 49 $ — $ 49 $ — 401(h) account assets 29 Total other postretirement benefit plan assets $ 78 The fair value of net assets in the Master Trust by asset class and level within the fair value hierarchy was: December 31, 2015 Fair Value Measurement Using Total Level 1 Level 2 Level 3 Talen Energy Retirement Plans Master Trust Cash and cash equivalents $ 108 $ 108 $ — $ — Equity securities: U.S.: Large-cap 90 23 67 — Small-cap 33 33 — — International 190 — 190 — Commingled debt 273 — 273 — Debt securities: U.S. Treasury and U.S. government sponsored agency 192 189 3 — Corporate 231 — 231 — International government 1 — 1 — Other 3 — 3 — Alternative investments: Commodities 28 — 28 — Real estate 48 — 48 — Private equity 31 — — 31 Hedge funds 69 — 69 — Derivatives: Interest rate swaps 32 — 32 — Other 5 — 5 — Talen Energy Retirement Plans Master Trust assets, at fair value $ 1,334 $ 353 $ 950 $ 31 Receivables and payables, net (a) (31 ) 401(h) accounts restricted for other postretirement benefit obligations (29 ) Total Talen Energy Retirement Plans Master Trust pension assets $ 1,274 (a) Receivables and payables represent amounts for investments sold/purchased, but not yet settled along with interest and dividends earned, but not yet received. |
Schedule of Reconciliation of Assets Classified as Level 3 | A reconciliation of the Master Trust assets classified as Level 3 at December 31, 2015 is as follows: Private equity Balance at beginning of period $ — Acquisitions (a) 35 Purchases, sales and settlements (4 ) Balance at end of period $ 31 (a) Transferred from a master trust maintained by PPL. |
Schedule of Expected Benefit Payments | The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid by the plans. Pension Other Postretirement Benefit Payment 2016 $ 75 $ 2 2017 81 3 2018 87 5 2019 92 7 2020 98 9 2021-2025 538 63 |
Jointly Owned Facilities (Table
Jointly Owned Facilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Regulated Operations [Abstract] | |
Schedule of Jointly Owned Facilities | At December 31, 2015 and 2014 the Talen Energy Balance Sheets reflect the owned interests in the facilities below. Ownership Interest Electric Plant Other Property Accumulated Depreciation Construction Work in Progress December 31, 2015 Generating Plants Susquehanna 90.00 % $ 4,791 $ — $ 3,639 $ 148 Conemaugh 16.25 % 326 — 156 7 Keystone 12.34 % 218 — 111 3 Colstrip Units 1 & 2 50.00 % 48 — 5 2 Colstrip Units 3 30.00 % 30 — 2 3 Merill Creek Reservoir 8.37 % — 22 16 — December 31, 2014 Generating Plants Susquehanna 90.00 % $ 4,746 $ — $ 3,591 $ 117 Conemaugh 16.25 % 330 — 141 2 Keystone 12.34 % 213 — 102 2 Colstrip Units 1 & 2 50.00 % 16 — 4 3 Colstrip Unit 3 30.00 % 16 — 2 2 Merill Creek Reservoir 8.37 % — 22 15 — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of long-term energy and energy related contracts | Talen Energy enters into long-term energy and energy related contracts which include commitments to purchase: Contract Type Fuels (a) Limestone Natural Gas Storage Natural Gas Transportation Power, excluding wind RECs Wind Power Maximum Maturity Date 2027 2030 2026 2034 2021 2020 2027 (a) As a result of depressed wholesale market prices for electricity and natural gas. Talen Energy has experienced a shift in the dispatching of its generation fleet from coal-fired to combined-cycle natural gas-fired generation. This reduction in coal-fired generation output has resulted in a surplus of coal inventory at certain of Talen Energy's Pennsylvania plants. To mitigate the risk of oversupply, Talen Energy incurred pre-tax charges of $41 million during 2015 in connection with an agreement to reduce its 2015 through 2018 contracted coal deliveries. These charges were recorded to "Fuel" on the Statement of Income. |
Labor Agreement Negotiations | In 2014, the following charges for separation benefits were recorded. Pension Benefits $ 11 Severance Compensation 6 Total Separation Benefits $ 17 Number of Employees 105 |
Guarantees | Talen Energy's exposure and related expiration dates are: December 31, 2015 Expiration Date Indemnifications for sales of assets $ 1,150 2016 - 2025 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Intercompany Support Cost Allocations | Talen Energy Supply was charged, primarily by PPL Services, the following amounts for the years ended December 31, including amounts applied to accounts that are further distributed between capital and expense. 2015 2014 2013 $ 67 $ 218 218 |
Fair Value Measurements and C45
Fair Value Measurements and Credit Concentration (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities Measured on Recurring Basis | The assets and liabilities measured at fair value were: December 31, 2015 December 31, 2014 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 141 $ 141 $ — $ — $ 352 $ 352 $ — $ — Restricted cash and cash equivalents (a) 106 106 — — 193 193 — — Price risk management assets: Energy commodities 693 — 597 96 1,318 6 1,171 141 Total price risk management assets 693 — 597 96 1,318 6 1,171 141 NDT funds: Cash and cash equivalents 11 11 — — 19 19 — — Equity securities U.S. large-cap 616 457 159 — 611 454 157 — U.S. mid/small-cap 87 37 50 — 89 37 52 — Debt securities U.S. Treasury 98 98 — — 99 99 — — U.S. government sponsored agency 6 — 6 — 9 — 9 — Municipality 83 — 83 — 76 — 76 — Investment-grade corporate 47 — 47 — 42 — 42 — Other 3 — 3 — 3 — 3 — Receivables (payables), net — (2 ) 2 — 2 — 2 — Total NDT funds 951 601 350 — 950 609 341 — Auction rate securities (b) 6 — — 6 8 — — 8 Total assets $ 1,897 $ 848 $ 947 $ 102 $ 2,821 $ 1,160 $ 1,512 $ 149 Liabilities Price risk management liabilities: Energy commodities $ 539 $ — $ 497 $ 42 $ 1,217 $ 5 $ 1,182 $ 30 Total price risk management liabilities $ 539 $ — $ 497 $ 42 $ 1,217 $ 5 $ 1,182 $ 30 (a) Current portion is included in "Restricted cash and cash equivalents" and long-term portion is included in "Other noncurrent assets" on the Balance Sheets. (b) Included in "Other investments" on the Balance Sheets. |
Reconciliation of Net Assets and Liabilities Classified as Level 3 | A reconciliation of net assets and liabilities classified as Level 3 for the years ended December 31, is as follows: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) 2015 2014 Energy Commodities, net Auction Rate Securities Total Energy Commodities, net Auction Rate Securities Total Balance at beginning of period $ 111 $ 8 $ 119 $ 24 $ 16 $ 40 Total realized/unrealized gains (losses) Included in earnings (91 ) — (91 ) (32 ) — (32 ) Included in OCI — — — — 1 1 Purchases (a) (39 ) — (39 ) (6 ) — (6 ) Sales 65 (2 ) 63 67 (9 ) 58 Settlements (24 ) — (24 ) 50 — 50 Transfers into Level 3 19 — 19 7 — 7 Transfers out of Level 3 13 — 13 1 — 1 Balance at end of period $ 54 $ 6 $ 60 $ 111 $ 8 $ 119 (a) 2015 includes positions acquired through the acquisition of RJS Power. |
Significant Unobservable Inputs Used in Fair Value Measurement of Assets and Liabilities Classified as Level 3 | The significant unobservable inputs used in and the quantitative information about the nonrecurring fair value measurement of assets and liabilities classified as Level 3 are as follows: Fair Value, net Valuation Significant Range Sapphire plants (November 30, 2015) $ 204 Discounted cash flow Proprietary model used to calculate plant value 100% (100%) Sapphire plants and C.P. Crane plant (September 30, 2015) 266 Discounted cash flow Proprietary model used to calculate plant value 100% (100%) Kerr Dam Project (March 31, 2014) 29 Discounted cash flow Proprietary model used to calculate plant value 38% (38%) Corette plant and emission allowances (December 31, 2013) — Discounted cash flow Long-term forward prices and a proprietary model used to calculate plant value 100% (100%) (a) The range and weighted average represent the percentage of fair value derived from the unobservable inputs. The significant unobservable inputs used in and quantitative information about the fair value measurement of assets and liabilities classified as Level 3 are as follows: December 31, 2015 Talen Energy Fair Value, net Asset (Liability) Valuation Technique Significant Unobservable Input(s) Range (Weighted Average) (a) Energy commodities Natural gas contracts (b) $ 55 Discounted cash flow Proprietary model used to calculate forward prices 10% - 100% (50%) Power sales contracts (c) 13 Discounted cash flow Proprietary model used to calculate forward prices 10% - 100% (100%) FTR purchase contracts (d) (2 ) Discounted cash flow Historical settled prices used to model forward prices 100% (100%) Heat rate call options (e) (10 ) Discounted cash flow Proprietary model used to calculate forward prices 100% (100%) CRR purchase contracts (g) (2 ) Discounted cash flow Proprietary model used to calculate forward prices 100% (100%) Auction rate securities (f) 6 Discounted cash flow Modeled from SIFMA Index 46% - 47% (46.5%) December 31, 2014 Talen Energy Fair Value, net Asset (Liability) Valuation Technique Significant Unobservable Range (Weighted Average) (a) Energy commodities Natural gas contracts (b) $ 59 Discounted cash flow Proprietary model used to calculate forward prices 11% - 100% (52%) Power sales contracts (c) (1 ) Discounted cash flow Proprietary model used to calculate forward prices 10% - 100% (59%) FTR purchase contracts (d) 3 Discounted cash flow Historical settled prices used to model forward prices 100% (100%) Heat rate call options (e) 50 Discounted cash flow Proprietary model used to calculate forward prices 23% - 51% (45%) Auction rate securities (f) 8 Discounted cash flow Modeled from SIFMA Index 51% - 69% (63%) (a) The range and weighted average represent the percentage of fair value derived from the unobservable inputs. (b) As the forward price of natural gas increases/(decreases), the fair value of purchase contracts increases/(decreases). As the forward price of natural gas increases/(decreases), the fair value of sales contracts (decreases)/increases. (c) As forward market prices increase/(decrease), the fair value of contracts (decreases)/increases. As volumetric assumptions for contracts in a gain position increase/(decrease), the fair value of contracts increases/(decreases). As volumetric assumptions for contracts in a loss position increase/(decrease), the fair value of the contracts (decreases)/increases. (d) As the forward implied spread increases/(decreases), the fair value of the contracts increases/(decreases). (e) The proprietary model used to calculate fair value incorporates market heat rates, correlations and volatilities. As the market implied heat rate increases/(decreases), the fair value of purchased calls increases/(decreases). As the market implied heat rate increases/(decreases), the fair value of sold calls (decreases)/increases. (f) The model used to calculate fair value incorporates an assumption that the auctions will continue to fail. As the modeled forward rates of the SIFMA Index increase/(decrease), the fair value of the securities increases/(decreases). (g) As the forward implied spread increases/(decreases), the fair value of the contracts increases/(decreases). |
Fair Value of Assets and Liabilities Classified as Level 3 Measured on Recurring Basis Included in Earnings | Net gains and losses on assets and liabilities classified as Level 3 and included in earnings for the years ended December 31 are reported in the Statements of Income as follows: Energy Commodities, net Wholesale Energy Retail Energy Energy Purchases 2015 2014 2015 2014 2015 2014 Total gains (losses) included in earnings $ (80 ) $ (77 ) $ (2 ) $ 23 $ (9 ) $ 22 Change in unrealized gains (losses) relating (7 ) 50 29 37 (6 ) (4 ) |
Fair Value of Assets and Liabilities Measured on Nonrecurring Basis | The following nonrecurring fair value measurements occurred during the reporting periods, resulting in impairments: Carrying Fair Value Measurements Pre-tax Loss (c) Sapphire plants (November 30, 2015) $ 270 $ 204 $ 66 Sapphire plants and C.P. Crane plant (September 30, 2015) 388 266 122 Kerr Dam Project (March 31, 2014) (d) 47 29 18 Corette plant and emission allowances (December 31, 2013) 65 — 65 (a) Represents carrying value before fair value measurement. (b) For the Sapphire plants, also reflects estimated cost to sell at September 30, 2015. (c) The impairment on the Kerr Dam Project is included in "Income (Loss) from Discontinued Operations (net of income taxes)" on the Statement of Income. The impairments on the C.P. Crane plant and the Sapphire plants are included in "Impairments" on the Statement of Income. (d) The Kerr Dam Project was included in the sale of the Talen Montana hydroelectric facilities and the assets were removed from the Balance Sheet. See Note 6 for additional information. |
Fair Value of Financial Instruments Not Recorded at Fair Value - Other | The carrying amounts of long-term debt on the Balance Sheets and its estimated fair values are set forth below. The fair value was primarily estimated using an income approach by discounting future cash flows at estimated current cost of funding rates, which incorporates the credit risk of Talen Energy Supply. Long-term debt is classified as Level 2. December 31, 2015 December 31, 2014 Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt $ 4,203 $ 3,343 $ 2,218 $ 2,204 |
Derivative Instruments and He46
Derivative Instruments and Hedging Activities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Commodity Price Risk (Non-trading) - Economic Activity - Pre-tax Gains (Losses) Associated with Economic Activity | The unrealized gains (losses) for economic activity for the years ended December 31 were as follows. 2015 2014 2013 Operating Revenues Wholesale energy (a) $ 115 $ 72 $ (267 ) Retail energy (9 ) 29 12 Operating Expenses Fuel 15 (27 ) (4 ) Energy purchases (a) 60 (74 ) 132 (a) In the third quarter of 2015, Talen Energy refined an input used in its valuation technique for certain PJM basis curves as observable inputs became available. This change resulted in the recording of a $30 million net unrealized gain, primarily reflected in "Wholesale energy" revenue on the Statement of Income. |
Commodity Volumes - Volumes of Derivative (Sales) Purchase Contracts | At December 31, 2015 , the net volumes of derivative (sales)/purchase contracts used in support of the various strategies discussed above were as follows. Volumes (a) Commodity Unit of Measure 2016 2017 2018 Thereafter Power MWh (36,420,569 ) (4,474,975 ) (568,082 ) (334,101 ) Capacity MW-Month (5,953 ) 6 3 — Gas MMBtu 146,474,333 17,898,993 14,987,372 3,063,441 FTRs MW-Month 8,724 200 — — Oil Barrels 65,559 — — — CRRs MWh 2,491,444 538,584 — — Emission Allowances Tons 75,617 — — — (a) Volumes for option contracts factor in the probability of an option being exercised and may be less than the notional amount of the option. |
Fair Value and Balance Sheet Location of Derivative Instruments | The following table presents the fair value and location of commodity derivative instruments not designated as hedging instruments recorded on the Balance Sheets. December 31, 2015 December 31, 2014 Assets Liabilities Assets Liabilities Current: Price Risk Management Assets/Liabilities: $ 562 $ 431 $ 1,079 $ 1,024 Noncurrent: Price Risk Management Assets/Liabilities: 131 108 239 193 Total derivatives $ 693 $ 539 $ 1,318 $ 1,217 |
Pre-tax Gain (Loss) on Derivative Instruments Recognized in Income or on the Balance Sheet | The following tables present the pre-tax effect of derivative instruments recognized in income. Gain (Loss) Reclassified from AOCI into Income (Effective Portion) Derivative Relationships Location of Gain (Loss) Recognized in Income on Derivative 2015 2014 2013 Cash Flow Hedges: Commodity contracts Wholesale energy $ (3 ) $ 1 $ 240 Energy purchases 33 31 (58 ) Depreciation 1 2 2 Discontinued operations — 8 23 Total $ 31 $ 42 $ 207 Derivatives Not Designated as Hedging Instruments Location of Gain (Loss) Recognized in Income on Derivative 2015 2014 2013 Commodity contracts Wholesale energy $ 742 $ (505 ) $ (9 ) Retail energy 22 30 25 Fuel (6 ) (30 ) 2 Energy purchases (452 ) 165 40 Discontinued operations — 6 14 Total $ 306 $ (334 ) $ 72 |
Derivative Positions Eligible for Offset with Related Cash Collateral | The table below summarizes the energy commodities derivative positions presented in the balance sheets where a right of setoff exists under these arrangements and related cash collateral received or pledged. Assets Liabilities Eligible for Offset Eligible for Offset Gross Derivative Instruments Cash Collateral Received Net Gross Derivative Instruments Cash Collateral Pledged Net December 31, 2015 $ 693 $ 437 $ 74 $ 182 $ 539 $ 437 $ 30 $ 72 December 31, 2014 $ 1,318 $ 1,060 $ 10 $ 248 $ 1,217 $ 1,060 $ 58 $ 99 |
Derivative Positions Eligible for Offset with Related Cash Collateral | The table below summarizes the energy commodities derivative positions presented in the balance sheets where a right of setoff exists under these arrangements and related cash collateral received or pledged. Assets Liabilities Eligible for Offset Eligible for Offset Gross Derivative Instruments Cash Collateral Received Net Gross Derivative Instruments Cash Collateral Pledged Net December 31, 2015 $ 693 $ 437 $ 74 $ 182 $ 539 $ 437 $ 30 $ 72 December 31, 2014 $ 1,318 $ 1,060 $ 10 $ 248 $ 1,217 $ 1,060 $ 58 $ 99 |
Goodwill and Other Asset Impa47
Goodwill and Other Asset Impairments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in carrying amount of Talen Energy's goodwill by segment for the years ended December 31 were as follows. East West Total 2015 2014 2015 2014 2015 2014 Balance at beginning of period (a) $ 72 $ 72 $ — $ 14 $ 72 $ 86 Goodwill recognized during the period (b) 393 — — — 393 — Allocation to discontinued operations (c) — — — (14 ) — (14 ) Impairment (465 ) — — — (465 ) — Balance at end of period (a) $ — $ 72 $ — $ — $ — $ 72 (a) There was no accumulated impairment loss related to goodwill at December 31, 2014 and $465 million at December 31, 2015. (b) Recognized as a result of the acquisition of RJS Power. See Note 6 for additional information. (c) Goodwill allocated to the sale of the Talen Montana hydroelectric generating facilities and written off. See Note 6 for additional information related to the sale. |
Other Intangible Assets (Tables
Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Other Intangible Assets | The gross carrying amount and the accumulated amortization of other intangible assets were: December 31, 2015 December 31, 2014 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Land and transmission rights $ 16 $ 13 $ 17 $ 14 Emission allowances/RECs (a) 9 10 Licenses and other (b) (c) 325 23 270 19 Total $ 350 $ 36 $ 297 $ 33 (a) Includes emission allowances and RECs that are expensed when consumed or sold; therefore, there is no accumulated amortization. (b) "Other" includes costs for the development of licenses, the most significant of which is the COLA. Amortization of these costs begins when the related asset is placed in service. See Note 6 for additional information on the COLA. (c) "Other" also includes intangibles acquired as part of the RJS Power acquisition including $28 million for a pipeline lease that is being amortized over a 14 year period and $16 million for an ash site permit that is being amortized over a 22 year period. |
Schedule of Amortization Expense Excluding Consumption of Emissions Allowances/RECs | Amortization expense for the years ended December 31, excluding consumption of emission allowances, RECs and RGGI credits of $44 million , $24 million and $23 million in 2015 , 2014 , and 2013 , was as follows: 2015 2014 2013 Amortization Expense $ 4 $ 4 $ 5 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of Change in Asset Retirement Obligation | The changes in the carrying amounts of Talen Energy's AROs were as follows. 2015 2014 ARO at beginning of period $ 425 $ 404 Accretion expense 35 32 Changes in estimate of cash flow or settlement date (a) 25 (16 ) Obligations assumed in RJS Power acquisition 18 — Obligations incurred 2 13 Obligations settled (4 ) (8 ) ARO at end of period $ 501 $ 425 (a) Includes increases in 2015 of $41 million as a result of a new CCR rule. Further changes to the AROs may be required as estimates are refined and analysis of the rule continues. |
Available-for-Sale Securities (
Available-for-Sale Securities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Available-for-sale Securities [Abstract] | |
Schedule of Available-for-sale Securities Reconciliation | The following table shows the amortized cost, the gross unrealized gains and losses recorded in AOCI and the fair value of Talen Energy's available-for-sale securities. December 31, 2015 December 31, 2014 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value NDT funds: Cash and cash equivalents $ 11 $ — $ — $ 11 $ 19 $ — $ — $ 19 Equity securities 297 406 — 703 283 417 — 700 Debt securities 230 7 — 237 218 11 — 229 Receivables/payables, net — — — — 2 — — 2 Total NDT funds $ 538 $ 413 $ — $ 951 $ 522 $ 428 $ — $ 950 Auction rate securities $ 6 $ — $ — $ 6 $ 8 $ — $ — $ 8 |
Investments Classified by Contractual Maturity Date | The following table shows the scheduled maturity dates of debt securities held at December 31, 2015 . Maturity Less Than 1 Year Maturity 1-5 Years Maturity 6-10 Years Maturity in Excess of 10 Years Total Amortized cost $ 7 $ 101 $ 67 $ 61 $ 236 Fair value 7 102 69 65 243 |
Schedule of Realized Gain (Loss) | The following table shows proceeds from and realized gains and losses on sales of available-for-sale securities. 2015 2014 2013 Proceeds from sales of NDT securities (a) $ 180 $ 154 $ 144 Other proceeds from sales 2 9 — Gross realized gains (b) 26 23 17 Gross realized losses (b) 22 10 7 (a) These proceeds are used to pay income taxes and fees related to managing the trust. Remaining proceeds are reinvested in the trust. (b) Excludes the impact of other-than-temporary impairment charges recognized on the Statements of Income. |
Accumulated Other Comprehensi51
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of changes in AOCI by component | The after-tax changes in Talen Energy's AOCI by component for the years ended December 31 were as follows. Unrealized gains (losses) Defined benefit plans Available- for-sale securities Qualifying derivatives Prior service costs Actuarial gain (loss) Total December 31, 2012 $ 112 $ 211 $ (10 ) $ (265 ) $ 48 Amounts arising during the period 67 — 2 71 140 Reclassifications from AOCI (6 ) (123 ) 4 14 (111 ) Net OCI during the period 61 (123 ) 6 85 29 December 31, 2013 $ 173 $ 88 $ (4 ) $ (180 ) $ 77 Amounts arising during the period 35 — 8 (120 ) (77 ) Reclassifications from AOCI (6 ) (25 ) 3 5 (23 ) Net OCI during the period 29 (25 ) 11 (115 ) (100 ) December 31, 2014 $ 202 $ 63 $ 7 $ (295 ) $ (23 ) Amounts arising during the period (6 ) — (3 ) 46 37 Reclassifications from AOCI (2 ) (19 ) (1 ) (18 ) (40 ) Net OCI during the period (8 ) (19 ) (4 ) 28 (3 ) December 31, 2015 $ 194 $ 44 $ 3 $ (267 ) $ (26 ) |
Reclassification from AOCI | The following table presents the gains (losses) and related income taxes for reclassifications from Talen Energy's AOCI for the years ended December 31 . The defined benefit plan components of AOCI are not reflected in their entirety in the statement of income during the years; rather, they are included in the computation of net periodic defined benefit costs (credits). See Note 9 for additional information. Affected Line Item on the Details about AOCI 2015 2014 Statements of Income Available-for-sale securities $ 4 $ 13 Other Income (Expense) - net Income Taxes (2 ) (7 ) Total After-tax 2 6 Qualifying derivatives Commodity contracts (3 ) 1 Wholesale energy 33 31 Energy purchases — 8 Discontinued operations 1 2 Other Total Pre-tax 31 42 Income Taxes (12 ) (17 ) Total After-tax 19 25 Defined benefit plans Prior service costs 1 (4 ) Net actuarial loss 29 (9 ) Total Pre-tax 30 (13 ) Income Taxes (11 ) 5 Total After-tax 19 (8 ) Total reclassifications during the period $ 40 $ 23 |
Quarterly Financial Data (Table
Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | For the 2015 Quarters Ended (a) For the 2014 Quarters Ended (a) Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Operating revenues as previously reported $ 946 $ 1,065 $ 1,419 $ (955 ) $ 1,007 $ 1,601 $ 2,083 Reclassification between revenue and expense (b) 145 (125 ) (135 ) 1,901 83 (409 ) (730 ) Reclassification from discontinued operations (c) — 8 36 — — — — Operating revenues 1,091 948 1,320 $ 1,122 946 1,090 1,192 1,353 Operating Income (Loss) as previously reported 34 (246 ) Reclassification from discontinued operations (c) 1 (100 ) Operating Income (Loss) 178 35 (346 ) 94 (79 ) 16 189 271 Income (Loss) from continuing operations after income taxes as previously reported 25 (339 ) Reclassification from discontinued operations (c) 1 (62 ) Income (Loss) from continuing operations after income taxes 96 26 (401 ) (62 ) (58 ) 2 94 149 Income (Loss) from discontinued operations as previously reported 1 (62 ) Reclassification from discontinued operations (c) (1 ) 62 Income (Loss) from discontinued operations — — — — (8 ) 11 7 213 Net Income (Loss) Attributable to Talen Energy Corporation stockholders (d) 96 26 (401 ) (62 ) (66 ) 13 101 362 Income (Loss) from continuing operations after income taxes available to Talen Energy Corporation stockholders (e) Basic EPS 1.15 0.26 (3.12 ) (0.48 ) (0.69 ) 0.03 1.13 1.78 Diluted EPS (f) 1.15 0.26 (3.12 ) (0.48 ) (0.69 ) 0.03 1.13 1.78 Net Income (Loss) available to Talen Energy Corporation stockholders (e) Basic EPS 1.15 0.26 (3.12 ) (0.48 ) (0.79 ) 0.16 1.21 4.33 Diluted EPS (f) 1.15 0.26 (3.12 ) (0.48 ) (0.79 ) 0.16 1.21 4.33 (a) Quarterly results can vary depending on, among other things, weather and the forward pricing of power. Accordingly, comparisons among quarters of a year may not be indicative of overall trends and changes in operations. (b) In the fourth quarter of 2015, Talen Energy reclassified amounts between "Wholesale energy" within operating revenues and "Energy purchases" within operating expense on the Statements of Income. See Note 1 to the Financial Statements for additional information. (c) In the fourth quarter of 2015, the Sapphire operations, which were originally classified as discontinued operations as part of the RJS Power acquisition, were reclassified to continuing operations. See Note 1 to the Financial Statements for additional information. (d) The third and fourth quarters of 2015 include impairment charges related to goodwill, the Sapphire plants and the C.P. Crane plant. The fourth quarter of 2014 includes a gain of $137 million (after tax) from the sale of hydroelectric generating facilities of Talen Montana. See Note 6 to the Financial Statements for additional information on the sale and Notes 14 and 16 to the Financial Statements for additional information on the impairments. (e) The sum of the quarterly amounts may not equal annual earnings per share due to changes in the number of common shares outstanding during the year or rounding. (f) As a result of reported losses, weighted-average shares used in the diluted earnings per share computations for the quarters ended September 30 and December 31, 2015 excludes incremental shares as they were anti-dilutive. |
Summary of Significant Accoun53
Summary of Significant Accounting Policies - Business and Consolidation (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2015USD ($)asset_groupMW | Dec. 31, 2014USD ($)position | |
Restructuring Cost and Reserve [Line Items] | ||
TSA term of agreement | 2 years | |
PPL | ||
Restructuring Cost and Reserve [Line Items] | ||
Services provided under TSA | $ 23 | |
Talen Energy Supply | ||
Restructuring Cost and Reserve [Line Items] | ||
Accelerated stock based compensation and pro-rated stock-based compensation awards | 25 | |
Spinoff from PPL | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | $ 12 | |
Spinoff | Spinoff from PPL | ||
Restructuring Cost and Reserve [Line Items] | ||
Charges for employee separation benefits | $ 16 | |
Number of eliminated positions | position | 112 | |
Amount of accrued liability for separation benefits | $ 9 | |
Number of asset groups that will be divested | asset_group | 1 | |
Number of asset groups proposed to be divested, one of which to be selected | asset_group | 2 | |
Spinoff | Spinoff from PPL | Minimum | ||
Restructuring Cost and Reserve [Line Items] | ||
Capacity, in total, to be divested in connection with the spinoff | MW | 1,300 | |
Spinoff | Spinoff from PPL | Maximum | ||
Restructuring Cost and Reserve [Line Items] | ||
Capacity, in total, to be divested in connection with the spinoff | MW | 1,400 |
Summary of Significant Accoun54
Summary of Significant Accounting Policies - Reclassifications (Details) - Energy purchases - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Quantifying Misstatement in Current Year Financial Statements [Line Items] | ||
Prior period reclassification adjustment | $ 845 | |
Scenario, Adjustment | ||
Quantifying Misstatement in Current Year Financial Statements [Line Items] | ||
Prior period reclassification adjustment | $ (19) |
Summary of Significant Accoun55
Summary of Significant Accounting Policies - Revenue (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | |||||||||||
Costs and estimated earnings in excess of billings | $ 18 | $ 20 | $ 18 | $ 20 | |||||||
Billings in excess of costs and estimated earnings | 44 | 41 | 44 | 41 | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||
Increase (decrease) to retail energy | (1,095) | (1,243) | $ (1,027) | ||||||||
Increase to energy-related business revenues | 544 | 601 | 527 | ||||||||
Increase to income (loss) from continuing operations before income taxes | (368) | 303 | (420) | ||||||||
Increase (decrease) to income from continuing operations after income taxes | (62) | $ (401) | $ 26 | $ 96 | 149 | $ 94 | $ 2 | $ (58) | (341) | 187 | (261) |
Increase (decrease) to net income | $ (62) | $ (401) | $ 26 | $ 96 | $ 362 | $ 101 | $ 13 | $ (66) | $ (341) | $ 410 | $ (230) |
Increase (decrease) to earnings per share (in dollars per share) | $ (0.48) | $ (3.12) | $ 0.26 | $ 1.15 | $ 4.33 | $ 1.21 | $ 0.16 | $ (0.79) | $ (3.10) | $ 4.91 | $ (2.75) |
Revenue adjustment for affiliate payable | Restatement adjustment | |||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||
Increase (decrease) to retail energy | $ 7 | ||||||||||
Increase (decrease) to income from continuing operations after income taxes | (4) | ||||||||||
Increase (decrease) to net income | $ (4) | ||||||||||
Increase (decrease) to earnings per share (in dollars per share) | $ (0.04) | ||||||||||
Revenue adjustment related to timing of revenue recognition | Restatement adjustment | |||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||
Increase to energy-related business revenues | $ 17 | ||||||||||
Increase to income (loss) from continuing operations before income taxes | 17 | ||||||||||
Increase (decrease) to income from continuing operations after income taxes | 10 | ||||||||||
Increase (decrease) to net income | $ 10 | ||||||||||
Increase (decrease) to earnings per share (in dollars per share) | $ 0.13 |
Summary of Significant Accoun56
Summary of Significant Accounting Policies - Accounts Receivable (Details) - Allowance for Doubtful Accounts - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||||
Balance at beginning of period | $ 2 | $ 21 | $ 23 | ||
Additions charged to income | 0 | 0 | 1 | ||
Additions charged to other accounts | 0 | 0 | 0 | ||
Deductions | [1] | 1 | 19 | [2] | 3 |
Balance at end of period | $ 1 | $ 2 | $ 21 | ||
[1] | Primarily related to uncollectible accounts written off. | ||||
[2] | In 2011, a wholesale customer filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy code. In 2014, Talen Energy Marketing received an insignificant amount of cash, settling the outstanding administrative claim and therefore, the related reserve balance was offset against the accounts receivable balance. |
Summary of Significant Accoun57
Summary of Significant Accounting Policies - Restricted Cash and Cash Equivalents (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash and cash equivalents | $ 106 | $ 193 |
Margin deposits posted to counterparties | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash and cash equivalents | 91 | 175 |
Ironwood debt service reserves | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash and cash equivalents | 15 | 17 |
Other | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash and cash equivalents | $ 0 | $ 1 |
Summary of Significant Accoun58
Summary of Significant Accounting Policies - Long-Lived and Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | |||
Capitalized interest costs | $ 20 | $ 23 | $ 37 |
Weighted average rates of depreciation | 3.18% | 3.28% |
Summary of Significant Accoun59
Summary of Significant Accounting Policies - Compensation and Benefits (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Percentage in excess of gains and losses equal to the plan's projected benefit obligation to use accelerated amortization | 30.00% |
Minimum percentage of gains and losses under the accelerated method that are amortized on a straight line basis | 10.00% |
Maximum percentage of gains and losses under the accelerated method that are amortized on a straight line basis | 30.00% |
Summary of Significant Accoun60
Summary of Significant Accounting Policies - Taxes (Details) $ in Millions | Dec. 31, 2014USD ($) |
PPL | Affiliated Entity | |
Related Party Transaction [Line Items] | |
Intercompany receivable | $ 105 |
Summary of Significant Accoun61
Summary of Significant Accounting Policies - Fuel, Materials and Supplies (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Public Utilities, Inventory [Line Items] | ||
Fuel, materials and supplies | $ 508 | $ 455 |
Fuel | ||
Public Utilities, Inventory [Line Items] | ||
Fuel, materials and supplies | 257 | 250 |
Materials and supplies | ||
Public Utilities, Inventory [Line Items] | ||
Fuel, materials and supplies | $ 251 | $ 205 |
Segment and Related Informati62
Segment and Related Information (Details) $ in Millions | Dec. 31, 2015USD ($)segment | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||
Number of segments | segment | 2 | 2 | ||||||||||||||
Revenues | $ 1,122 | $ 1,320 | $ 948 | $ 1,091 | $ 1,353 | $ 1,192 | $ 1,090 | $ 946 | $ 4,481 | $ 4,581 | $ 4,495 | |||||
Operating income (loss) | 94 | $ (346) | $ 35 | $ 178 | 271 | $ 189 | $ 16 | $ (79) | (39) | 397 | (293) | |||||
Depreciation | 356 | 297 | 299 | |||||||||||||
Amortization | [1] | 222 | 163 | 156 | ||||||||||||
Unrealized(gains) losses on derivative contracts | [2] | (119) | 4 | 171 | ||||||||||||
Impairments | 657 | 0 | 65 | |||||||||||||
Expenditures for long-lived assets | 464 | [3] | 431 | 568 | ||||||||||||
Assets | $ 12,826 | 12,826 | 10,760 | $ 12,826 | 12,826 | 10,760 | ||||||||||
Loss on lease termination | 697 | |||||||||||||||
Energy | ||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||
Revenues | 3,937 | 3,980 | 3,968 | |||||||||||||
Energy-Related Business | ||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||
Revenues | 544 | 601 | 527 | |||||||||||||
Operating Segments | East | ||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||
Revenues | 4,197 | 4,372 | 4,318 | |||||||||||||
Operating income (loss) | 198 | [4] | 558 | 652 | ||||||||||||
Depreciation | 327 | 296 | 288 | |||||||||||||
Amortization | 200 | [1] | 154 | 149 | ||||||||||||
Unrealized(gains) losses on derivative contracts | [2] | (143) | 35 | 163 | ||||||||||||
Impairments | 657 | [5] | 0 | |||||||||||||
Expenditures for long-lived assets | 387 | [3] | 400 | 537 | ||||||||||||
Assets | 11,430 | 11,430 | 10,308 | 11,430 | 11,430 | 10,308 | ||||||||||
Operating Segments | East | Energy | ||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||
Revenues | 3,653 | 3,771 | 3,791 | |||||||||||||
Operating Segments | East | Energy-Related Business | ||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||
Revenues | 544 | 601 | 527 | |||||||||||||
Operating Segments | West | ||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||
Revenues | 284 | 209 | 177 | |||||||||||||
Operating income (loss) | 2 | 71 | (750) | [4] | ||||||||||||
Depreciation | 26 | 1 | 11 | |||||||||||||
Amortization | 1 | [1] | 0 | 0 | ||||||||||||
Unrealized(gains) losses on derivative contracts | [2] | 24 | (31) | 8 | ||||||||||||
Impairments | 0 | 65 | [5] | |||||||||||||
Expenditures for long-lived assets | 39 | [3] | 31 | 31 | ||||||||||||
Assets | 1,231 | 1,231 | 160 | 1,231 | 1,231 | 160 | ||||||||||
Loss on lease termination | 697 | |||||||||||||||
Operating Segments | West | Energy | ||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||
Revenues | 284 | 209 | 177 | |||||||||||||
Operating Segments | West | Energy-Related Business | ||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||
Revenues | 0 | 0 | 0 | |||||||||||||
Other | ||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||
Revenues | 0 | 0 | 0 | |||||||||||||
Operating income (loss) | (239) | (232) | (195) | |||||||||||||
Depreciation | 3 | 0 | 0 | |||||||||||||
Amortization | 21 | [1] | 9 | 7 | ||||||||||||
Unrealized(gains) losses on derivative contracts | 0 | 0 | 0 | |||||||||||||
Impairments | 0 | 0 | ||||||||||||||
Expenditures for long-lived assets | 38 | [3] | 0 | 0 | ||||||||||||
Assets | [6] | $ 165 | $ 165 | $ 292 | $ 165 | 165 | 292 | |||||||||
Other | Energy | ||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||
Revenues | 0 | 0 | 0 | |||||||||||||
Other | Energy-Related Business | ||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||
Revenues | $ 0 | $ 0 | $ 0 | |||||||||||||
[1] | Represents non-cash items that include the amortization of nuclear fuel, debt discounts and premiums, debt issuance costs, emission allowances and RECs. | |||||||||||||||
[2] | See Note 15 for additional information. | |||||||||||||||
[3] | Does not include expenditures for business acquisitions. | |||||||||||||||
[4] | In 2015, the East segment includes impairment charges of $657 million related to goodwill and other asset impairments. See Notes 14 and 16 for additional information. In 2013, the West segment includes a charge of $697 million for the termination of the lease of the Colstrip plant and a $65 million impairment charge related to the Corette plant. See Notes 6 and 14 for additional information. | |||||||||||||||
[5] | See Notes 14 and 16 for additional information. | |||||||||||||||
[6] | Other primarily consists of unallocated items, including cash and PP&E. |
Earnings (Loss) Per Share for63
Earnings (Loss) Per Share for Talen Energy Corporation (Details) - USD ($) $ in Millions | Jun. 01, 2015 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income (Numerator) | |||||||||||||
Income (Loss) from Continuing Operations After Income Taxes | $ (341) | $ 187 | $ (262) | ||||||||||
Income (Loss) from Discontinued Operations (net of income taxes) | 0 | 223 | 32 | ||||||||||
Net Income (Loss) Attributable to Member | $ (62) | $ (401) | $ 26 | $ 96 | $ 362 | $ 101 | $ 13 | $ (66) | $ (341) | $ 410 | $ (230) | ||
Shares of Common Stock (Denominator) | |||||||||||||
Weighted-average shares - Basic EPS (in shares) | 109,898,000 | 83,524,000 | 83,524,000 | ||||||||||
Weighted-average shares - Diluted EPS (in shares) | 109,898,000 | 83,524,000 | 83,524,000 | ||||||||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 731,000 | ||||||||||||
Common Stock | |||||||||||||
Schedule of Capitalization, Equity [Line Items] | |||||||||||||
Stock issuance (shares) | 128,499,023 | ||||||||||||
Consummation of spinoff transaction, shares | 83,524,365 | 83,524,000 | [1],[2] | ||||||||||
Common stock issued for acquisition of RJS Power, shares | 44,974,658 | 44,975,000 | [1] | ||||||||||
[1] | Shares in thousands. Each share entitles the holder to one vote on any questions presented at any stockholders' meeting. | ||||||||||||
[2] | Upon consummation of the spinoff on June 1, 2015, Talen Energy Supply's predecessor member's equity balance was transferred to Talen Energy Corporation's "Additional paid-in capital." See Note 1 for additional information on the spinoff. |
Income and Other Taxes - Income
Income and Other Taxes - Income Tax Expense (Benefit) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Expense (Benefit) | |||
Current - Federal | $ 43 | $ 28 | $ 118 |
Current - State | 0 | 13 | 16 |
Total Current Expense | 43 | 41 | 134 |
Deferred - Federal | (22) | 66 | (263) |
Deferred - State | (37) | 11 | (27) |
Total Deferred Expense (Benefit) | (59) | 77 | (290) |
Investment tax credit, net - federal | (11) | (2) | (3) |
Income Tax Expense (Benefit) | (27) | 116 | (159) |
Total income tax expense (benefit) - Federal | 10 | 92 | (148) |
Total income tax expense (benefit) - State | (37) | 24 | (11) |
Current and deferred federal and state tax expense recorded to Discontinued Operations | 109 | 17 | |
Federal and state tax expense (benefit) recorded to OCI | $ (1) | $ (56) | $ 47 |
Income and Other Taxes - Reconc
Income and Other Taxes - Reconciliation of Income Tax Expense (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Reconciliation of Income Tax Expense | ||||||
Federal income tax on Income from Continuing Operations Before Income Taxes at statutory tax rate - 35% | $ (129) | $ 106 | $ (147) | |||
Federal statutory rate | 35.00% | 35.00% | 35.00% | |||
Increase Decrease Due To [Abstract] | ||||||
State income taxes, net of federal income tax benefit | $ (3) | $ 17 | $ (24) | |||
Federal and state tax reserve adjustments | (12) | [1] | 0 | 0 | ||
Federal income tax credits | (9) | [2] | 0 | (8) | [2] | |
State deferred tax rate change, net of federal benefit | [3] | (17) | (1) | 15 | ||
Federal and state income tax return adjustments | (7) | 0 | 0 | |||
Goodwill Impairment | 144 | [4] | 0 | 0 | ||
Other | 6 | (6) | 5 | |||
Total increase (decrease) | 102 | 10 | (12) | |||
Income Tax Expense (Benefit) | $ (27) | $ 116 | $ (159) | |||
Effective income tax rate | 7.40% | 38.30% | 37.90% | |||
Internal Revenue Service (IRS) [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Tax benefit for portion of the settlement of previously unrecognized tax benefits | $ 12 | |||||
[1] | In 2015, open audits for the tax years 2008-2011 were settled by PPL with the IRS resulting in a tax benefit of $12 million for Talen Energy's portion of the settlement of previously unrecognized tax benefits. | |||||
[2] | During 2015, Talen Energy recorded a benefit primarily related to the recognition of previously unamortized tax credits as a result of the sale of Talen Renewable Energy in November 2015. During 2013, Talen Energy recorded deferred tax benefits related to investment tax credits on progress expenditures for the Holtwood hydroelectric plant expansion. See Note 6 for additional information. | |||||
[3] | During 2015, 2014 and 2013, Talen Energy recorded adjustments related to its December 31 state deferred tax liabilities as a result of annual changes in state apportionment and the impact on the future estimated state income tax rate. | |||||
[4] | A significant portion of the impairment was related to non-deductible goodwill. See Note 16 for additional information on the goodwill impairment. 2015 2014 2013Taxes, other than income State gross receipts$41 $45 $37State capital stock1 1 1Property and other23 11 15Total$65 $57 $53 |
Income and Other Taxes - Taxes,
Income and Other Taxes - Taxes, Other than Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Taxes, other than income | |||
State gross receipts | $ 41 | $ 45 | $ 37 |
State capital stock | 1 | 1 | 1 |
Property and other | 23 | 11 | 15 |
Total | $ 65 | $ 57 | $ 53 |
Income and Other Taxes - Deferr
Income and Other Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred Tax Assets | ||
Deferred investment tax credits | $ 6 | $ 11 |
Accrued pension costs | 121 | 98 |
Federal net operating loss carryforwards | 110 | 22 |
Federal tax credit carryforwards | 0 | 13 |
State net operating loss carryforwards | 19 | 79 |
Other | 105 | 79 |
Valuation allowances | (10) | (78) |
Total deferred tax assets | 351 | 224 |
Deferred Tax Liabilities | ||
Plant - net | 1,874 | 1,374 |
Unrealized gain on qualifying derivatives | 53 | 28 |
Other | 10 | 42 |
Total deferred tax liabilities | 1,937 | 1,444 |
Net deferred tax liability | $ 1,586 | $ 1,220 |
Income and Other Taxes - Operat
Income and Other Taxes - Operating Loss and Tax Credit Carryforwards (Details) $ in Millions | Dec. 31, 2015USD ($) | [1],[2] |
Domestic Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | $ 314 | |
State and Local Jurisdiction [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | $ 274 | |
[1] | A portion of the net operating loss carryforwards consist of tax losses obtained as a result of the acquisition of MACH Gen. The utilization of these carryforwards are subject to annual limitations imposed by Section 382 of the Internal Revenue Code, which limits a company’s ability to deduct prior net operating losses following a more than 50 percent change in ownership. The Section 382 limitation is not expected to prevent Talen Energy from utilizing its federal loss carryforwards in future years. State net operating loss carryforwards are also dependent upon state taxable income or loss, the state’s proportion of taxable net income and the application of state laws, which can change from year to year and impact the amount of such carryforward utilization. | |
[2] | The federal and state net operating loss carryforwards presented above are net of unrecognized tax benefits recorded for deferred tax assets. |
Income and Other Taxes - Valuat
Income and Other Taxes - Valuation Allowance (Details) - Valuation Allowance of Deferred Tax Assets - USD ($) $ in Millions | Jun. 01, 2015 | Nov. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||||
Balance at beginning of period | $ 78 | $ 78 | $ 74 | |||
Additions charged to income | 0 | 0 | 4 | |||
Additions charged to other accounts | $ (78) | $ (10) | (68) | [1] | 0 | 0 |
Deductions | 0 | 0 | 0 | |||
Balance at end of period | $ 10 | $ 78 | $ 78 | |||
[1] | 2015 decreased by $78 million for valuation allowances against deferred tax assets retained by PPL upon spinoff and increased by $10 million for valuation allowances established against deferred tax assets acquired in the MACH Gen acquisition in November 2015. |
Income and Other Taxes - Unreco
Income and Other Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Changes to unrecognized tax benefits | ||||
Beginning of period | $ 15 | $ 15 | ||
Increases based on tax positions of prior years | 31 | [1] | 0 | |
Decreases relating to settlements with taxing authorities (b) | (15) | [2] | 0 | |
End of period | 31 | 15 | $ 15 | |
Total unrecognized tax benefits and related indirect effects that, if recognized, would decrease the effective tax rate | 30 | 14 | ||
Accrued interest receivable (payable) related to tax positions settled prior to the spinoff | 16 | |||
Interest expense (benefit) related to tax positions | $ 0 | $ (1) | $ 5 | |
[1] | Increased unrecognized tax benefits were established to offset the deferred tax asset related to net operating loss carryforwards as a result of the MACH Gen acquisition in November 2015. | |||
[2] | Decreased as a result of IRS audit settlements for tax years 1998-2011 during the year ended December 31, 2015. |
Financing Activities - Credit A
Financing Activities - Credit Arrangements (Details) | 12 Months Ended | ||
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Nov. 01, 2010USD ($) | |
Credit Arrangments and Short-term Debt | |||
Capacity | $ 2,010,000,000 | ||
Borrowed | 608,000,000 | ||
Letters of Credit Issued | 194,000,000 | ||
Unused Capacity | 1,208,000,000 | ||
Unamortized fees included in interest expense | 12,000,000 | ||
Long-term Debt | 3,804,000,000 | $ 1,683,000,000 | |
Talen Energy Supply | |||
Credit Arrangments and Short-term Debt | |||
Long-term Debt | 3,804,000,000 | $ 1,683,000,000 | |
Revolving Credit Facility | Talen Energy Supply Revolving Credit Facility | Talen Energy Supply | |||
Credit Arrangments and Short-term Debt | |||
Capacity | 1,850,000,000 | ||
Borrowed | 500,000,000 | ||
Letters of Credit Issued | 163,000,000 | ||
Unused Capacity | $ 1,187,000,000 | ||
Covenant, ratio of secured debt to adjusted EBITDA | 4.50 | ||
Weighted average interest rate | 2.67% | ||
Carrying value of property subject to lien to support facility | $ 7,000,000,000 | ||
Revolving Credit Facility | New MACH Gen Revolving Credit Facility | |||
Credit Arrangments and Short-term Debt | |||
Capacity | 160,000,000 | ||
Borrowed | 108,000,000 | ||
Letters of Credit Issued | 31,000,000 | ||
Unused Capacity | $ 21,000,000 | ||
Weighted average interest rate | 5.04% | ||
Letter of Credit | Talen Energy Supply Revolving Credit Facility | Talen Energy Supply | |||
Credit Arrangments and Short-term Debt | |||
Capacity | $ 925,000,000 | ||
Letter of Credit | First Lien Credit and Guaranty Agreement | |||
Credit Arrangments and Short-term Debt | |||
Capacity | 642,000,000 | ||
Letter of Credit | New MACH Gen Revolving Credit Facility | |||
Credit Arrangments and Short-term Debt | |||
Capacity | 120,000,000 | ||
Collateral amount | 1,000,000,000 | ||
Facility Agreement | Talen Energy Supply | |||
Credit Arrangments and Short-term Debt | |||
Potential maximum Facility Agreement capacity | 500,000,000 | ||
Secured Trading Facility | Talen Energy Supply | |||
Credit Arrangments and Short-term Debt | |||
Secured energy marketing and trading facility capacity | $ 1,300,000,000 | $ 800,000,000 | |
Facility term | 5 years | ||
Renewal term | 1 year | ||
Long-term Debt | $ 54,000,000 |
Financing Activities - Schedule
Financing Activities - Schedule of Long-term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Total long-term debt before adjustments | $ 4,228 | $ 2,238 |
Fair market value adjustments | (23) | (19) |
Unamortized premium and (discount), net | (2) | (1) |
Total long-term debt | 4,203 | 2,218 |
Less current portion of long-term debt | 399 | 535 |
Total long-term debt, noncurrent | $ 3,804 | 1,683 |
Senior Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 5.41% | |
Total long-term debt before adjustments | $ 3,713 | 2,193 |
Senior Secured Notes | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 8.86% | |
Total long-term debt before adjustments | $ 41 | 45 |
Term Loan B | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 6.21% | |
Total long-term debt before adjustments | $ 474 | $ 0 |
Financing Activities - Long-ter
Financing Activities - Long-term Debt Instruments (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||||
Jan. 31, 2016 | Oct. 31, 2015 | Sep. 30, 2015 | May. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Nov. 02, 2015 | Aug. 31, 2015 | Jul. 31, 2015 | Jun. 30, 2015 | Jun. 01, 2015 | |
Debt Instrument [Line Items] | ||||||||||||
Total aggregate consideration paid to repurchase debt | $ 335,000,000 | $ 309,000,000 | $ 747,000,000 | |||||||||
debt outstanding | 4,203,000,000 | 2,218,000,000 | ||||||||||
Amount drawn under credit facility | 608,000,000 | |||||||||||
Maximum borrowing capacity | $ 2,010,000,000 | |||||||||||
RJS Power | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long term debt assumed | $ 1,244,000,000 | |||||||||||
MACH Gen. LLC | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long term debt assumed | $ 470,000,000 | |||||||||||
Senior Unsecured Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Weighted average interest rate | 5.41% | |||||||||||
Senior Unsecured Notes | Senior Unsecured Notes Due 2025 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Weighted average interest rate | 8.857% | |||||||||||
Senior Unsecured Notes | Senior Unsecured Notes Due 2025 | Subsequent Event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt redemption | $ 41,000,000 | |||||||||||
Make whole premium | $ 14,000,000 | |||||||||||
Senior Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Weighted average interest rate | 8.86% | |||||||||||
Exempt Facilities Revenue Refunding Bonds | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, face amount | $ 231,000,000 | |||||||||||
Interest rate | 3.00% | |||||||||||
Exempt Facilities Revenue Refunding Bonds | Series 2009A Bonds | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, face amount | $ 100,000,000 | |||||||||||
Interest rate | 6.40% | |||||||||||
Exempt Facilities Revenue Refunding Bonds | Series 2009B and 2009C Bonds | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, face amount | $ 131,000,000 | |||||||||||
Interest rate | 5.00% | |||||||||||
Fixed interest rate period until mandatory repurchase and optional remarketing | 5 years | |||||||||||
Term Loan | MACH Gen. LLC | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
debt outstanding | $ 475,000,000 | |||||||||||
Talen Energy Supply | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Total aggregate consideration paid to repurchase debt | $ 335,000,000 | $ 309,000,000 | $ 747,000,000 | |||||||||
Talen Energy Supply | Unsecured Debt | Redeemable Senior Unsecured Notes due 2025 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, face amount | $ 600,000,000 | |||||||||||
Interest rate | 6.50% | 6.50% | ||||||||||
Proceeds from debt, net | $ 591,000,000 | |||||||||||
Talen Energy Supply | Unsecured Debt | Redeemable Senior Unsecured Notes due 2025 | On or prior to June 1, 2020 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Redemption price percentage | 100.00% | |||||||||||
Talen Energy Supply | Unsecured Debt | Redeemable Senior Unsecured Notes due 2025 | On or prior to June 1, 2018 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Redemption price percentage | 106.50% | |||||||||||
Redemption price, percentage of principal amount that may be redeemed | 35.00% | |||||||||||
Talen Energy Supply | Senior Notes | Senior Notes due 2019 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate | 4.625% | |||||||||||
Talen Energy Supply | Senior Notes | Senior Notes due 2019 | RJS Power | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate | 5.125% | |||||||||||
Long term debt assumed | $ 1,250,000,000 | |||||||||||
Talen Energy Supply | REset Put Securities | REset Put Securities due 2035 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, face amount | $ 300,000,000 | |||||||||||
Interest rate | 5.70% | |||||||||||
Total aggregate consideration paid to repurchase debt | $ 434,000,000 | |||||||||||
Principal amount repurchased | 300,000,000 | |||||||||||
Remarketing option value paid | $ 134,000,000 |
Financing Activities - Debt Mat
Financing Activities - Debt Maturities (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Disclosure [Abstract] | ||
2,016 | $ 396 | |
2,017 | 5 | |
2,018 | 424 | |
2,019 | 1,244 | |
2,020 | 179 | |
Thereafter | 1,980 | |
Total | $ 4,228 | $ 2,238 |
Financing Activities Financing
Financing Activities Financing Activities - Preferred Stock and Distributions (Details) $ in Billions | Dec. 31, 2015USD ($)shares |
Debt Disclosure [Abstract] | |
Preferred stock, shares authorized (in shares) | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 |
Preferred stock, shares outstanding (in shares) | 0 |
Restricted net assets | $ | $ 3.3 |
Acquisitions, Development and76
Acquisitions, Development and Divestitures - Acquisitions (Details) $ / shares in Units, $ in Millions | Dec. 31, 2015USD ($)MW | Nov. 02, 2015USD ($) | Jun. 01, 2015USD ($)shares | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($)$ / shares | Dec. 31, 2014USD ($)$ / shares | Dec. 31, 2013USD ($) | |
Allocation of the Purchase Price | ||||||||
Goodwill | $ 0 | $ 0 | $ 72 | $ 86 | ||||
RJS Power | ||||||||
Business Acquisition [Line Items] | ||||||||
Total consideration | $ 902 | |||||||
Allocation of the Purchase Price | ||||||||
Current assets | [1] | 168 | ||||||
Assets of discontinued operations | [2] | 375 | ||||||
PP&E | 1,777 | |||||||
Other intangibles | 46 | |||||||
Short-term debt | (36) | |||||||
Current liabilities | (224) | |||||||
Liabilities of discontinued operations | (5) | |||||||
Long-term debt | (1,244) | |||||||
Deferred income taxes | (266) | |||||||
Other noncurrent liabilities | [3] | (82) | ||||||
Net identifiable assets acquired | 509 | |||||||
Goodwill | [4] | 393 | ||||||
Net assets acquired | 902 | |||||||
Accounts receivable acquired | $ 41 | 41 | ||||||
Below market contract | $ 33 | |||||||
Reduction in goodwill due to valuation adjustments | $ 5 | |||||||
Pro Forma Information | ||||||||
Actual operating revenue | 528 | |||||||
Actual net income (loss) | (74) | |||||||
RJS Power | Common Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Shares issued in acquisition (in shares) | shares | 44,974,658 | |||||||
MACH Gen. LLC | ||||||||
Business Acquisition [Line Items] | ||||||||
Total consideration | $ 600 | |||||||
Generating capacity | MW | 2,344 | |||||||
Allocation of the Purchase Price | ||||||||
Current assets | [5] | 31 | ||||||
PP&E | 1,275 | |||||||
Other intangibles | 3 | |||||||
Short-term debt | (103) | |||||||
Current liabilities | (28) | |||||||
Long-term debt | (470) | |||||||
Deferred income taxes | (108) | |||||||
Net identifiable assets acquired | 600 | |||||||
Accounts receivable acquired | 9 | |||||||
Pro Forma Information | ||||||||
Actual operating revenue | 28 | |||||||
Actual net income (loss) | (9) | |||||||
MACH Gen. LLC | Previously Reported | ||||||||
Business Acquisition [Line Items] | ||||||||
Total consideration | $ 603 | |||||||
RJS Power and MACH Gen | ||||||||
Pro Forma Information | ||||||||
Pro forma operating revenues | 5,109 | 6,031 | ||||||
Pro forma income (loss) after tax from continuing operations | $ (396) | $ 345 | ||||||
Pro Forma earnings per share, basic (in dollars per share) | $ / shares | $ (3.08) | $ 2.68 | ||||||
Pro Forma earnings per share, diluted (in dollars per share) | $ / shares | $ (3.08) | $ (2.68) | ||||||
Nonrecurring acquisition, integration and other costs | $ 20 | |||||||
[1] | Includes gross contractual amount of the accounts receivable acquired of $41 million, which approximates fair value. | |||||||
[2] | See Note 14 for information on impairment charges recorded during 2015 related to the Sapphire plants initial classification as assets held for sale and discontinued operations. See Note 1 for additional information on the subsequent reclassification to assets held and used. | |||||||
[3] | Includes $33 million of "out-of-the-money" coal contracts that will be amortized over the life of the contracts terms as the coal is consumed. | |||||||
[4] | The allocation above is as of the acquisition date of June 1, 2015. As further discussed in Note 16, goodwill was fully impaired during 2015, which included the goodwill recognized in the acquisition of RJS Power. | |||||||
[5] | Includes gross contractual amounts of accounts receivable acquired of $9 million, which approximates fair value. |
Acquisitions, Development and77
Acquisitions, Development and Divestitures Acquisitions, Development and Divestitures - Divestitures and Announced Divestitures (Details) $ in Millions | Dec. 31, 2015USD ($)MW | Feb. 26, 2016USD ($) | Jan. 31, 2016USD ($) | Nov. 30, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Mar. 31, 2016USD ($) | Oct. 31, 2015USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Proceeds from the sale of the Renewable business | $ 116 | $ 0 | $ 0 | ||||||
Disposal Group Disposed by Sale | Renewable Energy Business | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Proceeds from the sale of the Renewable business | $ 116 | ||||||||
Gain on sale of business | $ 10 | ||||||||
Disposal Group Held for Sale | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
PP&E related to businesses held for sale | $ 936 | 936 | |||||||
Disposal Group Held for Sale | Holtwood and Lake Wallenpaupack Hydroelectric Projects | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Capacity of facility sold | MW | 308 | ||||||||
Disposal Group Held for Sale | Holtwood and Lake Wallenpaupack Hydroelectric Projects | Forecast | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Purchase price of disposal group | $ 860 | ||||||||
Disposal Group Held for Sale | Talen Ironwood Holdings, LLC | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Purchase price of disposal group | $ 657 | ||||||||
Capacity of facility sold | MW | 660 | ||||||||
Individually significant component pretax income (loss) attributable to parent | $ 73 | $ 67 | $ (22) | ||||||
Disposal Group Held for Sale | Talen Ironwood Holdings, LLC | Subsequent Event | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Repayments of indebtedness | $ 41 | ||||||||
Gain | $ 159 | ||||||||
Disposal Group Held for Sale | C.P. Crane, LLC | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Capacity of facility sold | MW | 402 |
Acquisitions, Development and78
Acquisitions, Development and Divestitures - Discontinued Operations and Other (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||
Nov. 30, 2014USD ($)facilityMW | Dec. 31, 2013USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | ||
Components of Discontinued Operations | ||||||||||||||
Income (Loss) from Discontinued Operations (net of income taxes) | $ 0 | $ 0 | $ 0 | $ 0 | $ 213 | $ 7 | $ 11 | $ (8) | $ 0 | $ 223 | $ 32 | |||
Payments for operating lease termination | $ 271 | |||||||||||||
Loss on lease termination | 697 | |||||||||||||
Loss on lease termination, net of tax | 413 | |||||||||||||
Discontinued Operations | Talen Montana Hydro Sale | ||||||||||||||
Divestitures - Talen Montana Hydro Sale | ||||||||||||||
Capacity of facility sold | MW | 633 | |||||||||||||
Agreed upon sales price for disposal of hydroelectric facilities owned by Talen Montana | $ 900 | |||||||||||||
Number of hydroelectric facilities owned by Talen Montana to be sold | facility | 11 | |||||||||||||
Components of Discontinued Operations | ||||||||||||||
Operating revenues | 117 | 139 | ||||||||||||
Gain on the sale (pre-tax) | 306 | 0 | ||||||||||||
Interest expense | [1] | 9 | 12 | |||||||||||
Income (loss) before income taxes | 332 | 49 | ||||||||||||
Income (Loss) from Discontinued Operations (net of income taxes) | $ 223 | $ 32 | ||||||||||||
[1] | Represents allocated interest expense based upon the discontinued operations share of the net assets of Talen Energy. |
Acquisitions, Development and79
Acquisitions, Development and Divestitures Acquisitions, Development and Divestitures - Development (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2015USD ($)applicantproject | Dec. 31, 2014USD ($) | |
Public Utilities, General Disclosures [Line Items] | ||
Number of applicants still active in DOE nuclear guarantee program | applicant | 8 | |
Number of applicants that submitted loan guarantees to the DOE | applicant | 10 | |
Current appropriated federal loan guarantees for nuclear projects | $ 18,500 | |
Maximum number of projects the DOE is expected to finance | project | 3 | |
Proposed Bell Bend Nuclear Unit | ||
Public Utilities, General Disclosures [Line Items] | ||
Amount currently authorized by the Board of Directors to spend on Bell Bend COLA | $ 256 | |
Capitalized costs associated with licensing efforts | $ 201 | $ 188 |
Acquisitions, Development and80
Acquisitions, Development and Divestitures - Brunner Island Co-firing Project (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Construction work in progress | $ 536 | $ 443 |
Brunner Island Plant | ||
Property, Plant and Equipment [Line Items] | ||
Total project cost | 118 | |
Construction work in progress | $ 23 | $ 5 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Leases [Abstract] | |||
Rent expense | $ 14 | $ 29 | $ 55 |
Total Future Minimum Rental Payments | |||
2,016 | 19 | ||
2,017 | 18 | ||
2,018 | 8 | ||
2,019 | 5 | ||
2,020 | 5 | ||
Thereafter | 26 | ||
Total | $ 81 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized (in shares) | 5,630,000 | ||
Compensation Expense | |||
Compensation expense | $ 18 | ||
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized (in shares) | 2,000,000 | ||
Vesting period | 3 years | ||
Expiration period | 10 years | ||
Period after grant date | 1 year | ||
Options granted in period (in shares) | 991,101 | ||
Nonvested options (in shares) | 991,101 | ||
Grant date fair value (in dollars per share) | $ 4.91 | ||
Weighted average exercise price (in dollars per share) | $ 19 | ||
Weighted-average remaining contractual term (in years) | 9 years 4 months 24 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Risk-free interest rate | 2.05% | ||
Expected option life | 6 years | ||
Expected stock volatility | 21.55% | ||
Compensation Expense | |||
Outstanding shares (in shares) | 991,101 | 2,745,016 | |
Restricted Stock Units, Performance Units and Stock Options | |||
Compensation Expense | |||
Compensation expense | $ 33 | $ 27 | |
Tax benefit | $ 14 | $ 11 | |
Unrecognized compensation | $ 11 | ||
Period for recognition (in years) | 2 years 4 months 24 days | ||
Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Units granted in period (in shares) | 265,849 | ||
Units outstanding (in shares) | 265,849 | ||
Grant date fair value (in dollars per share) | $ 18.74 | ||
Compensation Expense | |||
Unvested shares (in shares) | 265,849 | ||
Restricted Stock Units (RSUs), Matching Grants | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 2 years | ||
Restricted stock and restricted stock units | |||
Compensation Expense | |||
Unvested shares (in shares) | 1,457,900 | ||
Performance shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Units granted in period (in shares) | 158,900 | ||
Units outstanding (in shares) | 158,900 | ||
Grant date fair value (in dollars per share) | $ 21.17 | ||
Performance period | 3 years | ||
Maximum target award percentage | 200.00% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Expected stock volatility | 31.80% | ||
Compensation Expense | |||
Unvested shares (in shares) | 158,900 | 291,492 | |
Director [Member] | Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options granted in period (in shares) | 34,967 | ||
Grant date fair value (in dollars per share) | $ 13.23 |
Retirement and Postemployment83
Retirement and Postemployment Benefits - Net Period Defined Benefit Costs (Credits) and Other Changes in Plan Assets and Benefit Obligations) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 01, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Unfunded status of plan | $ 257 | |||
Amortization of: | ||||
Actuarial loss expected to be amortized from AOCI into net periodic benefit costs | $ 20 | |||
Pension Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Unfunded status of plan | 340 | $ 40 | ||
Net Periodic Defined Benefit Costs (Credits) | ||||
Service cost | 31 | 5 | $ 7 | |
Interest cost | 46 | 9 | 8 | |
Expected return on plan assets | (60) | (11) | (10) | |
Amortization of: | ||||
Actuarial (gain) loss | 16 | 2 | 3 | |
Curtailment charges (credits) | 0 | 0 | 0 | |
Net periodic defined benefit costs (credits) | 33 | 5 | 8 | |
Other Changes in Plan Assets and Benefit Obligations Recognized in OCI - Gross: [Abstract] | ||||
Curtailments | 0 | 0 | 0 | |
Net (gain) loss | 54 | 26 | (15) | |
Prior service costs (credit) | 3 | 0 | 0 | |
Amortization of: | ||||
Actuarial gain (loss) | (16) | (2) | (3) | |
Prior service credit (cost) | 0 | 0 | 0 | |
Total recognized in OCI | 41 | 24 | (18) | |
Total recognized in net periodic benefit costs and OCI | 74 | 29 | (10) | |
Net periodic defined benefit costs (credits) charged to operating expense, excluding amounts charged to construction and other non-expense accounts | 48 | 39 | 45 | |
Pension Benefits | Predecessor | ||||
Amortization of: | ||||
Net periodic defined benefit costs (credits) charged to operating expense, excluding amounts charged to construction and other non-expense accounts | 16 | 34 | 38 | |
Other Postretirement Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Unfunded status of plan | 9 | 10 | ||
Net Periodic Defined Benefit Costs (Credits) | ||||
Service cost | 2 | 0 | 1 | |
Interest cost | 2 | 1 | 0 | |
Expected return on plan assets | (3) | 0 | 0 | |
Amortization of: | ||||
Actuarial (gain) loss | 0 | 0 | 0 | |
Curtailment charges (credits) | 0 | (1) | 0 | |
Net periodic defined benefit costs (credits) | 1 | 0 | 1 | |
Other Changes in Plan Assets and Benefit Obligations Recognized in OCI - Gross: [Abstract] | ||||
Curtailments | 0 | 1 | 0 | |
Net (gain) loss | 0 | (1) | (1) | |
Prior service costs (credit) | 0 | 0 | (3) | |
Amortization of: | ||||
Actuarial gain (loss) | 0 | 0 | 0 | |
Prior service credit (cost) | 1 | 0 | 0 | |
Total recognized in OCI | 1 | 0 | (4) | |
Total recognized in net periodic benefit costs and OCI | 2 | 0 | (3) | |
Net periodic defined benefit costs (credits) charged to operating expense, excluding amounts charged to construction and other non-expense accounts | 2 | 3 | 6 | |
Other Postretirement Benefits | Predecessor | ||||
Amortization of: | ||||
Net periodic defined benefit costs (credits) charged to operating expense, excluding amounts charged to construction and other non-expense accounts | $ 0 | $ 3 | $ 5 |
Retirement and Postemployment84
Retirement and Postemployment Benefits Retirement and Postemployment Benefits - Allocated Funded Status (Details) - USD ($) $ in Millions | Jun. 01, 2015 | Dec. 31, 2014 |
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Funded Status of Plan | $ (257) | |
PPL Services [Member] | Pension Plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Funded Status of Plan | $ 259 | |
PPL Services [Member] | Other Postretirement Benefit Plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Funded Status of Plan | $ 34 |
Retirement and Postemployment85
Retirement and Postemployment Benefits - Weighted-Average Assumptions, Cost Trend Rates, Funded Status, and Multiemployer Plans (Details) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2015USD ($)plan | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Jun. 01, 2015USD ($) | |||
Assumed Health Care Cost Trend Rates (Details) [Abstract] | ||||||
Health care cost trend rate assumed for next year, obligations | 6.80% | 7.20% | 7.60% | |||
Health care cost trend rate assumed for next year, cost | 7.20% | 7.60% | 8.00% | |||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate), obligations | 5.00% | 5.00% | 5.00% | |||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate),cost | 5.00% | 5.00% | 5.50% | |||
Year that the rate reaches the ultimate trend rate, obligations | 2,020 | 2,020 | 2,020 | |||
Year that the rate reaches the ultimate trend rate, cost | 2,020 | 2,020 | 2,019 | |||
Change in Plan Assets | ||||||
Funded Status, end of period | $ (257) | |||||
Multiemployer Plans | ||||||
Multiemployer Plan, period contributions | $ 60 | $ 73 | $ 68 | |||
Multiemployer Pension Plans | ||||||
Multiemployer Plans | ||||||
Multiemployer Plan, number of plans | plan | 60 | |||||
Multiemployer Plan, period contributions | $ 34 | 40 | 36 | |||
Multiemployer Other Postretirement Plans | ||||||
Multiemployer Plans | ||||||
Multiemployer Plan, period contributions | $ 26 | $ 33 | $ 32 | |||
Pension Benefits | ||||||
Weighted Average Assumptions Used in the Valuation of the Benefit Obligations (Details) [Abstract] | ||||||
Benefit obligations valuation discount rate | 4.65% | 4.28% | ||||
Benefit obligations valuation rate of compensation increase | 3.98% | 4.03% | ||||
Weighted Average Assumptions Used to Determine the Net Periodic Benefit Costs (Details) [Abstract] | ||||||
Net periodic benefit costs discount rate | 4.41% | 5.18% | 4.25% | |||
Net periodic benefit costs rate of compensation increase | 3.99% | 3.94% | 3.95% | |||
Net periodic benefit costs expected return on plan assets | [1] | 7.00% | 7.00% | 7.00% | ||
Change in Benefit Obligation | ||||||
Benefit Obligation, beginning of period | $ 210 | $ 163 | ||||
Transfer of benefit obligation at spinoff | 1,416 | [2] | 0 | |||
Service cost | 31 | 5 | $ 7 | |||
Interest cost | 46 | 9 | 8 | |||
Plan amendments | 3 | 0 | ||||
Actuarial (gain) loss | (41) | 38 | ||||
Net Transfers in (out) | 0 | 0 | ||||
Curtailments | 0 | 0 | ||||
Gross benefits paid | (51) | (5) | ||||
Benefit Obligation, end of period | 1,614 | 210 | 163 | |||
Change in Plan Assets | ||||||
Plan assets at fair value, beginning of period | 170 | 147 | ||||
Transfer of plan assets at fair value at spinoff | 1,159 | 0 | ||||
Actual return on plan assets | (35) | 22 | ||||
Employer contributions | 32 | 6 | ||||
Gross benefits paid | (52) | (5) | ||||
Plan assets at fair value, end of period | 1,274 | 170 | $ 147 | |||
Funded Status, end of period | (340) | (40) | ||||
Amounts recognized in the Balance Sheets consist of: [Abstract] | ||||||
Current liability | 0 | 0 | ||||
Noncurrent liability | (340) | (40) | ||||
Net amount recognized, end of period | (340) | (40) | ||||
Amounts recognized in AOCI (pre-tax): [Abstract] | ||||||
Prior service cost (credit) | 2 | 0 | ||||
Net actuarial (gain) loss | 451 | 59 | ||||
Total | 453 | 59 | ||||
Total accumulated benefit obligation for defined benefit pension plans | $ 1,500 | $ 210 | ||||
Other Postretirement Benefits | ||||||
Weighted Average Assumptions Used in the Valuation of the Benefit Obligations (Details) [Abstract] | ||||||
Benefit obligations valuation discount rate | 4.60% | 3.81% | ||||
Benefit obligations valuation rate of compensation increase | 3.98% | 4.03% | ||||
Weighted Average Assumptions Used to Determine the Net Periodic Benefit Costs (Details) [Abstract] | ||||||
Net periodic benefit costs discount rate | 4.27% | 4.51% | 3.77% | |||
Net periodic benefit costs rate of compensation increase | 3.99% | 3.94% | 3.95% | |||
Net periodic benefit costs expected return on plan assets | [1] | 6.37% | ||||
Change in Benefit Obligation | ||||||
Benefit Obligation, beginning of period | $ 10 | $ 12 | ||||
Transfer of benefit obligation at spinoff | 80 | 0 | ||||
Service cost | 2 | 0 | $ 1 | |||
Interest cost | 2 | 1 | 0 | |||
Plan amendments | 0 | 0 | ||||
Actuarial (gain) loss | (4) | (1) | ||||
Net Transfers in (out) | (3) | 0 | ||||
Curtailments | 0 | (1) | ||||
Gross benefits paid | 0 | (1) | ||||
Benefit Obligation, end of period | 87 | 10 | 12 | |||
Change in Plan Assets | ||||||
Plan assets at fair value, beginning of period | 0 | 0 | ||||
Transfer of plan assets at fair value at spinoff | 80 | 0 | ||||
Actual return on plan assets | (2) | 0 | ||||
Employer contributions | 1 | 1 | ||||
Gross benefits paid | (1) | (1) | ||||
Plan assets at fair value, end of period | 78 | 0 | 0 | |||
Funded Status, end of period | (9) | (10) | ||||
Amounts recognized in the Balance Sheets consist of: [Abstract] | ||||||
Current liability | 0 | (1) | ||||
Noncurrent liability | (9) | (9) | ||||
Net amount recognized, end of period | (9) | (10) | ||||
Amounts recognized in AOCI (pre-tax): [Abstract] | ||||||
Prior service cost (credit) | (5) | (4) | ||||
Net actuarial (gain) loss | 8 | 0 | ||||
Total | 3 | (4) | ||||
Significant Specific Multiemployer Plan | Multiemployer Pension Plans | ||||||
Multiemployer Plans | ||||||
Contributions to specific plan | $ 5 | $ 5 | $ 5 | |||
Threshold, as a percentage, of contributions by individual contributors to a specific plan that if exceeded require disclosure | 5.00% | |||||
[1] | The expected long-term rates of return for pension and other postretirement benefits are based on management's projections using a best-estimate of expected returns, volatilities and correlations for each asset class. Each plan's specific current and expected asset allocations are also considered in developing a reasonable return assumption. | |||||
[2] | Values determined as of the spinoff date as discussed above. |
Retirement and Postemployment86
Retirement and Postemployment Benefits - Plan Assets and Expected Cash Flows (Details) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2015USD ($)partnershipfund | Dec. 31, 2014USD ($) | ||
Defined Benefit Plan Disclosure [Line Items] | |||||
Number of partnerships | partnership | 2 | ||||
Number of funds | fund | 2 | ||||
Assumptions Used in Calculations | |||||
The limited lives of four partnership of private equity investments (in years) | 10 years | ||||
The limited lives of fifth partnership of private equity investments (in years) | 15 years | ||||
The amount of potential liability that maybe required to be funded by the master trust during life of the partnership | $ 12 | ||||
Minimum number of days notice required to redeem shares for investments in hedge funds | 60 days | ||||
Maximum number of days notice required to redeem shares for investments in hedge funds | 95 days | ||||
Pension Benefits | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | $ 170 | $ 147 | 1,274 | $ 170 | |
Estimated future contributions | 40 | ||||
Reconciliation of Master Trust assets classified as Level 3 | |||||
Plan assets at fair value, beginning of period | 170 | 147 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 1,274 | 170 | |||
Expected Benefit Payments | |||||
2,016 | 75 | ||||
2,017 | 81 | ||||
2,018 | 87 | ||||
2,019 | 92 | ||||
2,020 | 98 | ||||
2021-2025 | 538 | ||||
Other Postretirement Benefits | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | 78 | 0 | |
Reconciliation of Master Trust assets classified as Level 3 | |||||
Plan assets at fair value, beginning of period | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | $ 78 | $ 0 | |||
Expected Benefit Payments | |||||
2,016 | 2 | ||||
2,017 | 3 | ||||
2,018 | 5 | ||||
2,019 | 7 | ||||
2,020 | 9 | ||||
2021-2025 | $ 63 | ||||
VEBA Trust | Other Postretirement Benefits | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Percentage of trust assets | 100.00% | ||||
Target asset allocation, weighted average | 100.00% | ||||
Fair value of plan assets | $ 49 | $ 49 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | $ 49 | ||||
VEBA Trust | Other Postretirement Benefits | Equity securities | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Percentage of trust assets | 53.00% | ||||
Target asset allocation, weighted average | 45.00% | ||||
VEBA Trust | Other Postretirement Benefits | Debt securities | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Percentage of trust assets | 46.00% | ||||
Target asset allocation, weighted average | 50.00% | ||||
VEBA Trust | Other Postretirement Benefits | Cash and cash equivalents | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Percentage of trust assets | 1.00% | ||||
Target asset allocation, weighted average | 5.00% | ||||
VEBA Trust | Other Postretirement Benefits | U.S. large-cap | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | $ 26 | $ 26 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 26 | ||||
VEBA Trust | Other Postretirement Benefits | Commingled debt | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 23 | 23 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 23 | ||||
VEBA Trust | Other Postretirement Benefits | 401(h) accounts restricted for other postretirement benefit obligations | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 29 | 29 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 29 | ||||
VEBA Trust | Other Postretirement Benefits | Total trust assets not including 401(h) assets | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 78 | 78 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 78 | ||||
VEBA Trust | Other Postretirement Benefits | Level 1 | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
VEBA Trust | Other Postretirement Benefits | Level 1 | U.S. large-cap | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
VEBA Trust | Other Postretirement Benefits | Level 1 | Commingled debt | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
VEBA Trust | Other Postretirement Benefits | Level 2 | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 49 | 49 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 49 | ||||
VEBA Trust | Other Postretirement Benefits | Level 2 | U.S. large-cap | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 26 | 26 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 26 | ||||
VEBA Trust | Other Postretirement Benefits | Level 2 | Commingled debt | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 23 | 23 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 23 | ||||
VEBA Trust | Other Postretirement Benefits | Level 3 | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
VEBA Trust | Other Postretirement Benefits | Level 3 | U.S. large-cap | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
VEBA Trust | Other Postretirement Benefits | Level 3 | Commingled debt | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | $ 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | $ 0 | ||||
Master Trust | Pension Benefits | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Percentage of trust assets | 100.00% | ||||
Target asset allocation, weighted average | 100.00% | ||||
Value of plan U.S. pension trust assets that relate to subsidiary | 170 | ||||
Undivided interest percentage in each asset category that PPL subsidiary holds | 4.00% | ||||
Fair value of plan assets | $ 1,334 | $ 1,334 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 1,334 | ||||
Master Trust | Pension Benefits | Cash and cash equivalents | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 108 | 108 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 108 | ||||
Master Trust | Pension Benefits | U.S. large-cap | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 90 | 90 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 90 | ||||
Master Trust | Pension Benefits | U.S. small-cap | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 33 | 33 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 33 | ||||
Master Trust | Pension Benefits | International Equity Securities | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 190 | 190 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 190 | ||||
Master Trust | Pension Benefits | Commingled debt | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 273 | 273 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 273 | ||||
Master Trust | Pension Benefits | U.S. Treasury and U.S. government sponsored agency | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 192 | 192 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 192 | ||||
Master Trust | Pension Benefits | Corporate debt securities | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 231 | 231 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 231 | ||||
Master Trust | Pension Benefits | International government | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 1 | 1 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 1 | ||||
Master Trust | Pension Benefits | Other | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 3 | 3 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 3 | ||||
Master Trust | Pension Benefits | Commodities alternative investments | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 28 | 28 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 28 | ||||
Master Trust | Pension Benefits | Real estate alternative investments | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 48 | 48 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 48 | ||||
Master Trust | Pension Benefits | Private equity alternative investments | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 31 | 31 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 31 | ||||
Master Trust | Pension Benefits | Hedge funds alternative investments | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 69 | 69 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 69 | ||||
Master Trust | Pension Benefits | Interest rate swaps | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 32 | 32 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 32 | ||||
Master Trust | Pension Benefits | Other derivatives | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 5 | 5 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 5 | ||||
Master Trust | Pension Benefits | Receivables and payables, net | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | [1] | 31 | 31 | ||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | [1] | 31 | |||
Master Trust | Pension Benefits | 401(h) accounts restricted for other postretirement benefit obligations | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 29 | 29 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 29 | ||||
Master Trust | Pension Benefits | Total trust assets not including 401(h) assets | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 1,274 | 1,274 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 1,274 | ||||
Master Trust | Pension Benefits | Level 1 | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 353 | 353 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 353 | ||||
Master Trust | Pension Benefits | Level 1 | Cash and cash equivalents | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 108 | 108 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 108 | ||||
Master Trust | Pension Benefits | Level 1 | U.S. large-cap | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 23 | 23 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 23 | ||||
Master Trust | Pension Benefits | Level 1 | U.S. small-cap | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 33 | 33 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 33 | ||||
Master Trust | Pension Benefits | Level 1 | International Equity Securities | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 1 | Commingled debt | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 1 | U.S. Treasury and U.S. government sponsored agency | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 189 | 189 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 189 | ||||
Master Trust | Pension Benefits | Level 1 | Corporate debt securities | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 1 | International government | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 1 | Other | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 1 | Commodities alternative investments | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 1 | Real estate alternative investments | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 1 | Private equity alternative investments | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 1 | Hedge funds alternative investments | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 1 | Interest rate swaps | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 1 | Other derivatives | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 2 | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 950 | 950 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 950 | ||||
Master Trust | Pension Benefits | Level 2 | Cash and cash equivalents | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 2 | U.S. large-cap | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 67 | 67 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 67 | ||||
Master Trust | Pension Benefits | Level 2 | U.S. small-cap | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 2 | International Equity Securities | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 190 | 190 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 190 | ||||
Master Trust | Pension Benefits | Level 2 | Commingled debt | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 273 | 273 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 273 | ||||
Master Trust | Pension Benefits | Level 2 | U.S. Treasury and U.S. government sponsored agency | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 3 | 3 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 3 | ||||
Master Trust | Pension Benefits | Level 2 | Corporate debt securities | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 231 | 231 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 231 | ||||
Master Trust | Pension Benefits | Level 2 | International government | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 1 | 1 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 1 | ||||
Master Trust | Pension Benefits | Level 2 | Other | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 3 | 3 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 3 | ||||
Master Trust | Pension Benefits | Level 2 | Commodities alternative investments | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 28 | 28 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 28 | ||||
Master Trust | Pension Benefits | Level 2 | Real estate alternative investments | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 48 | 48 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 48 | ||||
Master Trust | Pension Benefits | Level 2 | Private equity alternative investments | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 2 | Hedge funds alternative investments | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 69 | 69 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 69 | ||||
Master Trust | Pension Benefits | Level 2 | Interest rate swaps | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 32 | 32 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 32 | ||||
Master Trust | Pension Benefits | Level 2 | Other derivatives | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 5 | 5 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 5 | ||||
Master Trust | Pension Benefits | Level 3 | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 31 | 31 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 31 | ||||
Master Trust | Pension Benefits | Level 3 | Cash and cash equivalents | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 3 | U.S. large-cap | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 3 | U.S. small-cap | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 3 | International Equity Securities | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 3 | Commingled debt | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 3 | U.S. Treasury and U.S. government sponsored agency | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 3 | Corporate debt securities | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 3 | International government | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 3 | Other | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 3 | Commodities alternative investments | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 3 | Real estate alternative investments | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 3 | Private equity alternative investments | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | $ 0 | 31 | $ 0 | |
Reconciliation of Master Trust assets classified as Level 3 | |||||
Plan assets at fair value, beginning of period | 0 | ||||
Acquisitions | [2] | 35 | |||
Actual return on plan assets | |||||
Purchases, sales and settlements | (4) | ||||
Plan assets at fair value, end of period | 31 | $ 0 | |||
Master Trust | Pension Benefits | Level 3 | Hedge funds alternative investments | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 3 | Interest rate swaps | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | 0 | ||||
Master Trust | Pension Benefits | Level 3 | Other derivatives | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Fair value of plan assets | 0 | $ 0 | |||
Actual return on plan assets | |||||
Plan assets at fair value, end of period | $ 0 | ||||
Growth Portfolio | Master Trust | Pension Benefits | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Percentage of trust assets | 52.00% | ||||
Target asset allocation, weighted average | 55.00% | ||||
Growth Portfolio | Master Trust | Pension Benefits | Equity securities | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Percentage of trust assets | 24.00% | ||||
Growth Portfolio | Master Trust | Pension Benefits | Debt securities | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Percentage of trust assets | [3] | 14.00% | |||
Growth Portfolio | Master Trust | Pension Benefits | Alternative Investments | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Percentage of trust assets | 14.00% | ||||
Immunizing Portfolio | Master Trust | Pension Benefits | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Percentage of trust assets | 46.00% | ||||
Target asset allocation, weighted average | 44.00% | ||||
Immunizing Portfolio | Master Trust | Pension Benefits | Debt securities | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Percentage of trust assets | [3] | 40.00% | |||
Immunizing Portfolio | Master Trust | Pension Benefits | Derivatives | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Percentage of trust assets | 6.00% | ||||
Liquidity Portfolio | Master Trust | Pension Benefits | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Percentage of trust assets | 2.00% | ||||
Target asset allocation, weighted average | 1.00% | ||||
[1] | Receivables and payables represent amounts for investments sold/purchased, but not yet settled along with interest and dividends earned, but not yet received. | ||||
[2] | Transferred from a master trust maintained by PPL. | ||||
[3] | Includes commingled debt funds, which Talen Energy treats as debt securities for asset allocation purposes. |
Retirement and Postemployment87
Retirement and Postemployment Benefits - Savings Plans and Separation Benefits (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
May. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
IBEW local 1600 | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Term, in years, of newly approved labor agreement | 3 years | 3 years | ||
Deferred Savings Plans 401K | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Employer contributions to deferred savings plans | $ 16 | $ 14 | $ 12 |
Jointly Owned Facilities (Detai
Jointly Owned Facilities (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Susquehanna Generating Plants | ||
Jointly Owned Utility Plant Interests [Line Items] | ||
Ownership interest | 90.00% | 90.00% |
Electric plant | $ 4,791 | $ 4,746 |
Other property | 0 | 0 |
Accumulated depreciation | 3,639 | 3,591 |
Construction work in progress | $ 148 | $ 117 |
Conemaugh Generating Plants | ||
Jointly Owned Utility Plant Interests [Line Items] | ||
Ownership interest | 16.25% | 16.25% |
Electric plant | $ 326 | $ 330 |
Other property | 0 | 0 |
Accumulated depreciation | 156 | 141 |
Construction work in progress | $ 7 | $ 2 |
Keystone Generating Plants | ||
Jointly Owned Utility Plant Interests [Line Items] | ||
Ownership interest | 12.34% | 12.34% |
Electric plant | $ 218 | $ 213 |
Other property | 0 | 0 |
Accumulated depreciation | 111 | 102 |
Construction work in progress | $ 3 | $ 2 |
Colstrip Units 1 and 2 | ||
Jointly Owned Utility Plant Interests [Line Items] | ||
Ownership interest | 50.00% | 50.00% |
Electric plant | $ 48 | $ 16 |
Other property | 0 | 0 |
Accumulated depreciation | 5 | 4 |
Construction work in progress | $ 2 | $ 3 |
Colstrip Unit 3 | ||
Jointly Owned Utility Plant Interests [Line Items] | ||
Ownership interest | 30.00% | 30.00% |
Electric plant | $ 30 | $ 16 |
Other property | 0 | 0 |
Accumulated depreciation | 2 | 2 |
Construction work in progress | $ 3 | $ 2 |
Merill Creek Reservoir | ||
Jointly Owned Utility Plant Interests [Line Items] | ||
Ownership interest | 8.37% | 8.37% |
Electric plant | $ 0 | $ 0 |
Other property | 22 | 22 |
Accumulated depreciation | 16 | 15 |
Construction work in progress | $ 0 | $ 0 |
Colstrip Units 3 and 4 | NorthWestern Corporation | ||
Jointly Owned Utility Plant Interests [Line Items] | ||
Percent of total non-coal operating and construction costs each party is responsible for | 15.00% | |
Colstrip Units 3 and 4 | Talen Montana | ||
Jointly Owned Utility Plant Interests [Line Items] | ||
Percent of total non-coal operating and construction costs each party is responsible for | 15.00% |
Commitments and Contingencies -
Commitments and Contingencies - Energy Purchase and Sales Commitments (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2015USD ($) | ||
Power Sales Contract | ||
Long-term Purchase Commitment [Line Items] | ||
Maximum maturity date | 2,020 | |
Fuel | ||
Long-term Purchase Commitment [Line Items] | ||
Maximum maturity date | 2,027 | [1] |
Pre-tax charges incurred from coal contract modifications | $ 41 | |
Limestone | ||
Long-term Purchase Commitment [Line Items] | ||
Maximum maturity date | 2,030 | |
Natural Gas Storage | ||
Long-term Purchase Commitment [Line Items] | ||
Maximum maturity date | 2,026 | |
Natural Gas Transportation | ||
Long-term Purchase Commitment [Line Items] | ||
Maximum maturity date | 2,034 | |
Power, excluding wind | ||
Long-term Purchase Commitment [Line Items] | ||
Maximum maturity date | 2,021 | |
RECs | ||
Long-term Purchase Commitment [Line Items] | ||
Maximum maturity date | 2,020 | |
Wind Power | ||
Long-term Purchase Commitment [Line Items] | ||
Maximum maturity date | 2,027 | |
[1] | As a result of depressed wholesale market prices for electricity and natural gas. Talen Energy has experienced a shift in the dispatching of its generation fleet from coal-fired to combined-cycle natural gas-fired generation. This reduction in coal-fired generation output has resulted in a surplus of coal inventory at certain of Talen Energy's Pennsylvania plants. To mitigate the risk of oversupply, Talen Energy incurred pre-tax charges of $41 million during 2015 in connection with an agreement to reduce its 2015 through 2018 contracted coal deliveries. These charges were recorded to "Fuel" on the Statement of Income. |
Commitments and Contingencies90
Commitments and Contingencies - Legal Matters (Details) | Dec. 31, 2015claim | Dec. 31, 2015claim | Apr. 30, 2015project | Aug. 31, 2014project | May. 31, 2014project | Sep. 30, 2013project | Mar. 31, 2013USD ($)claim | Jul. 31, 2012USD ($)plaintiff | Apr. 30, 2012utility | Dec. 31, 2015USD ($) |
Legal Matters - Sierra Club Litigation (Numeric) [Abstract] | ||||||||||
Number of separate claims included in the complaint against PPL Montana | claim | 39 | |||||||||
Average requested amount, per day per violation, of injunctive relief and civil penalties | $ 36,000 | |||||||||
Amount of civil penalties to be used for beneficial mitigation projects | $ 100,000 | |||||||||
Estimated number of post-2000 projects alleged not to be in compliance with the Clean Air Act | project | 40 | |||||||||
Number of plant projects that had claims dismissed under alleged Clean Air Act violations | 2 | 3 | ||||||||
Number of plant projects included in a second amended complaint under alleged Clean Air Act violations | project | 8 | |||||||||
Number of plant projects with remaining claims to be pursued by plaintiffs | 4 | 4 | ||||||||
Number of plant projects with more preferable legal standards | claim | 2 | |||||||||
Regulatory Issues - Maryland Capacity Order (Numeric) [Abstract] | ||||||||||
Number electric utilities ordered to enter into long term contracts | utility | 3 | |||||||||
Regulatory Issues - Electric - Reliability Standards (Numeric) [Abstract] | ||||||||||
Maximum per day penalties for reliability violations | $ 1,000,000 | |||||||||
Pacific Northwest Markets | ||||||||||
Regulatory Issues - Pacific Northwest Markets (Numeric) [Abstract] | ||||||||||
Number of parties claiming refunds | plaintiff | 2 | |||||||||
Claim sought | $ 23,000,000 | |||||||||
Original amount of settled claim | $ 50,000,000 | |||||||||
Settled litigation | Pacific Northwest Markets | ||||||||||
Regulatory Issues - Pacific Northwest Markets (Numeric) [Abstract] | ||||||||||
Number of parties claiming refunds | plaintiff | 1 | |||||||||
Settlement amount reached with one of the parties | $ 75,000 |
Commitments and Contingencies91
Commitments and Contingencies - Environmental Matters and Other (Details) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Other - Nuclear Insurance (Numeric) [Abstract] | |
Maximum public liability for claims resulting an incident at nuclear station | $ 13,300,000,000 |
Maximum amount that could be assessed resulting from an incident at nuclear station | 255,000,000 |
Maximum amount payable per year resulting from an incident at nuclear station | 38,000,000 |
Maximum amount of insured property damage losses at nuclear station | 2,000,000,000 |
Maximum assessment for retroactive premiums for nuclear outage insurance coverage | 55,000,000 |
Acid Mine Drainage | |
Superfund and Other Remediation | |
Accrued discounted liability to cover the costs of pumping and treating groundwater | $ 19,000,000 |
Period of remediation | 50 years |
Discount rate for accrued remediation liability | 8.41% |
Expected undiscounted payments for work after 2020 | $ 92,000,000 |
Commitments and Contingencies92
Commitments and Contingencies - Labor Union Agreements (Details) - IBEW local 1600 $ in Millions | 1 Months Ended | 12 Months Ended |
May. 31, 2014 | Dec. 31, 2014USD ($)employee | |
Multiemployer Plans [Line Items] | ||
Term, in years, of newly approved labor agreement | 3 years | 3 years |
Pension Benefits | $ 11 | |
Severance Compensation | 6 | |
Total Separation Benefits | $ 17 | |
Number of Employees | employee | 105 |
Commitments and Contingencies93
Commitments and Contingencies - Guarantees and Other Assurances (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Guarantor Obligations [Line Items] | ||
Recorded liability for all guarantees | $ 0 | $ 13,000,000 |
Maximum aggregate coverage bodily injury and property damage | 100,000,000 | |
Indemnification Agreement | Indemnifications for sales of assets | ||
Guarantor Obligations [Line Items] | ||
Maximum exposure | $ 1,150,000,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Trailstone NA Logistic LLC | Transition Services Agreement | |||
Support Costs (Details) [Abstract] | |||
Amount of related party transaction | $ 6 | ||
Trailstone NA Logistic LLC | Costs for gas purchases | |||
Support Costs (Details) [Abstract] | |||
Amount of related party transaction | 52 | ||
Talen Energy Marketing | PPL Electric | |||
PLR Contracts/Purchase of Accounts Receivable (Numeric) [Abstract] | |||
Credit exposure with former affiliate under a Master Supply Agreement | 146 | $ 336 | $ 294 |
Talen Energy Supply | PPL Services | |||
Support Costs (Details) [Abstract] | |||
Support cost allocations from subsidiary of former parent to registrant | $ 67 | $ 218 | $ 218 |
Fair Value Measurements and C95
Fair Value Measurements and Credit Concentration (Assets and Liabilities Measured on Recurring Basis Table) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | |
Price risk management assets: | |||
Gross | $ 693 | $ 1,318 | |
Price risk management liabilities: | |||
Gross | 539 | 1,217 | |
Recurring | |||
Assets | |||
Cash and cash equivalents | 141 | 352 | |
Restricted cash and cash equivalents | [1] | 106 | 193 |
Price risk management assets: | |||
Gross | 693 | 1,318 | |
NDT funds | 951 | 950 | |
Total assets | 1,897 | 2,821 | |
Price risk management liabilities: | |||
Gross | 539 | 1,217 | |
Recurring | Cash and cash equivalents | |||
Price risk management assets: | |||
NDT funds | 11 | 19 | |
Recurring | U.S. large-cap | |||
Price risk management assets: | |||
NDT funds | 616 | 611 | |
Recurring | U.S. mid/small-cap | |||
Price risk management assets: | |||
NDT funds | 87 | 89 | |
Recurring | U.S. Treasury | |||
Price risk management assets: | |||
NDT funds | 98 | 99 | |
Recurring | U.S. government sponsored agency | |||
Price risk management assets: | |||
NDT funds | 6 | 9 | |
Recurring | Municipality | |||
Price risk management assets: | |||
NDT funds | 83 | 76 | |
Recurring | Investment-grade corporate | |||
Price risk management assets: | |||
NDT funds | 47 | 42 | |
Recurring | Other | |||
Price risk management assets: | |||
NDT funds | 3 | 3 | |
Recurring | Receivables (payables), net | |||
Price risk management assets: | |||
NDT funds | 0 | 2 | |
Recurring | Auction Rate Securities | |||
Price risk management assets: | |||
Auction rate securities | [2] | 6 | 8 |
Recurring | Energy Commodities, net | |||
Price risk management assets: | |||
Gross | 693 | 1,318 | |
Price risk management liabilities: | |||
Gross | 539 | 1,217 | |
Recurring | Level 1 | |||
Assets | |||
Cash and cash equivalents | 141 | 352 | |
Restricted cash and cash equivalents | [1] | 106 | 193 |
Price risk management assets: | |||
Gross | 0 | 6 | |
NDT funds | 601 | 609 | |
Total assets | 848 | 1,160 | |
Price risk management liabilities: | |||
Gross | 0 | 5 | |
Recurring | Level 1 | Cash and cash equivalents | |||
Price risk management assets: | |||
NDT funds | 11 | 19 | |
Recurring | Level 1 | U.S. large-cap | |||
Price risk management assets: | |||
NDT funds | 457 | 454 | |
Recurring | Level 1 | U.S. mid/small-cap | |||
Price risk management assets: | |||
NDT funds | 37 | 37 | |
Recurring | Level 1 | U.S. Treasury | |||
Price risk management assets: | |||
NDT funds | 98 | 99 | |
Recurring | Level 1 | Receivables (payables), net | |||
Price risk management assets: | |||
NDT funds | (2) | 0 | |
Recurring | Level 1 | Energy Commodities, net | |||
Price risk management assets: | |||
Gross | 0 | 6 | |
Price risk management liabilities: | |||
Gross | 0 | 5 | |
Recurring | Level 2 | |||
Price risk management assets: | |||
Gross | 597 | 1,171 | |
NDT funds | 350 | 341 | |
Total assets | 947 | 1,512 | |
Price risk management liabilities: | |||
Gross | 497 | 1,182 | |
Recurring | Level 2 | U.S. large-cap | |||
Price risk management assets: | |||
NDT funds | 159 | 157 | |
Recurring | Level 2 | U.S. mid/small-cap | |||
Price risk management assets: | |||
NDT funds | 50 | 52 | |
Recurring | Level 2 | U.S. government sponsored agency | |||
Price risk management assets: | |||
NDT funds | 6 | 9 | |
Recurring | Level 2 | Municipality | |||
Price risk management assets: | |||
NDT funds | 83 | 76 | |
Recurring | Level 2 | Investment-grade corporate | |||
Price risk management assets: | |||
NDT funds | 47 | 42 | |
Recurring | Level 2 | Other | |||
Price risk management assets: | |||
NDT funds | 3 | 3 | |
Recurring | Level 2 | Receivables (payables), net | |||
Price risk management assets: | |||
NDT funds | 2 | 2 | |
Recurring | Level 2 | Energy Commodities, net | |||
Price risk management assets: | |||
Gross | 597 | 1,171 | |
Price risk management liabilities: | |||
Gross | 497 | 1,182 | |
Recurring | Level 3 | |||
Price risk management assets: | |||
Gross | 96 | 141 | |
Total assets | 102 | 149 | |
Price risk management liabilities: | |||
Gross | 42 | 30 | |
Recurring | Level 3 | Auction Rate Securities | |||
Price risk management assets: | |||
Auction rate securities | [2] | 6 | 8 |
Recurring | Level 3 | Energy Commodities, net | |||
Price risk management assets: | |||
Gross | 96 | 141 | |
Price risk management liabilities: | |||
Gross | $ 42 | $ 30 | |
[1] | Current portion is included in "Restricted cash and cash equivalents" and long-term portion is included in "Other noncurrent assets" on the Balance Sheets. | ||
[2] | Included in "Other investments" on the Balance Sheets. |
Fair Value Measurements and C96
Fair Value Measurements and Credit Concentration (Net Asset and Liability Measured on Recurring Basis Level 3 Unobservable Inputs Reconciliation Rollforward) (Details) - Level 3 - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Reconciliation of Auction Rate Securities | |||
Total realized/unrealized gains (losses) included in OCI | $ 1 | ||
Reconciliation of Total | |||
Balance at beginning of period | $ 119 | 40 | |
Total realized/unrealized gains (losses) included in earnings | (91) | (32) | |
Total realized/unrealized gains (losses) included in OCI | 1 | ||
Purchases | (39) | [1] | (6) |
Sales | 63 | 58 | |
Settlements | (24) | 50 | |
Transfers into Level 3 | 19 | 7 | |
Transfers out of Level 3 | 13 | 1 | |
Balance at end of period | 60 | 119 | |
Auction Rate Securities | |||
Reconciliation of Auction Rate Securities | |||
Balance at beginning of period | 8 | 16 | |
Total realized/unrealized gains (losses) included in OCI | 1 | ||
Sales | (2) | (9) | |
Balance at end of period | 6 | 8 | |
Reconciliation of Total | |||
Total realized/unrealized gains (losses) included in OCI | 1 | ||
Energy Commodities, net | |||
Reconciliation of Energy Commodities, net | |||
Balance at beginning of period | 111 | 24 | |
Total realized/unrealized gains (losses) included in earnings | (91) | (32) | |
Purchases | (39) | [1] | (6) |
Sales | 65 | 67 | |
Settlements | (24) | 50 | |
Transfers into Level 3 | 19 | 7 | |
Transfers out of Level 3 | 13 | 1 | |
Balance at end of period | $ 54 | $ 111 | |
[1] | 2015 includes positions acquired through the acquisition of RJS Power. |
Fair Value Measurements and C97
Fair Value Measurements and Credit Concentration (Net Assets and Liabilities Measured on Recurring Basis Level 3 Significant Unobservable Inputs) (Details) - Recurring - Level 3 - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | |
Auction Rate Securities | |||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||
Fair value of net asset and (liability) | [1] | $ 6 | $ 8 |
Auction Rate Securities | Discounted Cash Flow | Minimum | |||
Fair Value Inputs [Abstract] | |||
Modeled from SIFMA Index | [2] | 46.00% | 51.00% |
Auction Rate Securities | Discounted Cash Flow | Maximum | |||
Fair Value Inputs [Abstract] | |||
Modeled from SIFMA Index | [2] | 47.00% | 69.00% |
Auction Rate Securities | Discounted Cash Flow | Weighted Average | |||
Fair Value Inputs [Abstract] | |||
Modeled from SIFMA Index | [2] | 46.50% | 63.00% |
Natural gas contracts | |||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||
Derivative, fair value, net | [3] | $ 55 | $ 59 |
Natural gas contracts | Discounted Cash Flow | Minimum | |||
Fair Value Inputs [Abstract] | |||
Proprietary model used to calculate forward prices | [2] | 10.00% | 11.00% |
Natural gas contracts | Discounted Cash Flow | Maximum | |||
Fair Value Inputs [Abstract] | |||
Proprietary model used to calculate forward prices | [2] | 100.00% | 100.00% |
Natural gas contracts | Discounted Cash Flow | Weighted Average | |||
Fair Value Inputs [Abstract] | |||
Proprietary model used to calculate forward prices | [2] | 50.00% | 52.00% |
Power sales contracts | |||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||
Derivative, fair value, net | [4] | $ 13 | $ (1) |
Power sales contracts | Discounted Cash Flow | Minimum | |||
Fair Value Inputs [Abstract] | |||
Proprietary model used to calculate forward prices | [2] | 10.00% | 10.00% |
Power sales contracts | Discounted Cash Flow | Maximum | |||
Fair Value Inputs [Abstract] | |||
Proprietary model used to calculate forward prices | [2] | 100.00% | 100.00% |
Power sales contracts | Discounted Cash Flow | Weighted Average | |||
Fair Value Inputs [Abstract] | |||
Proprietary model used to calculate forward prices | [2] | 100.00% | 59.00% |
FTR purchase contracts | |||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||
Derivative, fair value, net | [5] | $ (2) | $ 3 |
FTR purchase contracts | Discounted Cash Flow | Minimum | |||
Fair Value Inputs [Abstract] | |||
Historical settled prices used to model forward prices | [2] | 100.00% | 100.00% |
FTR purchase contracts | Discounted Cash Flow | Maximum | |||
Fair Value Inputs [Abstract] | |||
Historical settled prices used to model forward prices | [2] | 100.00% | 100.00% |
FTR purchase contracts | Discounted Cash Flow | Weighted Average | |||
Fair Value Inputs [Abstract] | |||
Historical settled prices used to model forward prices | [2] | 100.00% | 100.00% |
Heat rate call options | |||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||
Derivative, fair value, net | [6] | $ (10) | $ 50 |
Heat rate call options | Discounted Cash Flow | Minimum | |||
Fair Value Inputs [Abstract] | |||
Proprietary model used to calculate forward prices | [2] | 100.00% | 23.00% |
Heat rate call options | Discounted Cash Flow | Maximum | |||
Fair Value Inputs [Abstract] | |||
Proprietary model used to calculate forward prices | [2] | 100.00% | 51.00% |
Heat rate call options | Discounted Cash Flow | Weighted Average | |||
Fair Value Inputs [Abstract] | |||
Proprietary model used to calculate forward prices | [2] | 100.00% | 45.00% |
CRR purchase contracts | |||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | |||
Derivative, fair value, net | [7] | $ (2) | |
CRR purchase contracts | Discounted Cash Flow | Minimum | |||
Fair Value Inputs [Abstract] | |||
Proprietary model used to calculate forward prices | [2] | 100.00% | |
CRR purchase contracts | Discounted Cash Flow | Maximum | |||
Fair Value Inputs [Abstract] | |||
Proprietary model used to calculate forward prices | [2] | 100.00% | |
CRR purchase contracts | Discounted Cash Flow | Weighted Average | |||
Fair Value Inputs [Abstract] | |||
Proprietary model used to calculate forward prices | [2] | 100.00% | |
[1] | The model used to calculate fair value incorporates an assumption that the auctions will continue to fail. As the modeled forward rates of the SIFMA Index increase/(decrease), the fair value of the securities increases/(decreases). | ||
[2] | The range and weighted average represent the percentage of fair value derived from the unobservable inputs. | ||
[3] | As the forward price of natural gas increases/(decreases), the fair value of purchase contracts increases/(decreases). As the forward price of natural gas increases/(decreases), the fair value of sales contracts (decreases)/increases. | ||
[4] | As forward market prices increase/(decrease), the fair value of contracts (decreases)/increases. As volumetric assumptions for contracts in a gain position increase/(decrease), the fair value of contracts increases/(decreases). As volumetric assumptions for contracts in a loss position increase/(decrease), the fair value of the contracts (decreases)/increases. | ||
[5] | As the forward implied spread increases/(decreases), the fair value of the contracts increases/(decreases). | ||
[6] | The proprietary model used to calculate fair value incorporates market heat rates, correlations and volatilities. As the market implied heat rate increases/(decreases), the fair value of purchased calls increases/(decreases). As the market implied heat rate increases/(decreases), the fair value of sold calls (decreases)/increases. | ||
[7] | As the forward implied spread increases/(decreases), the fair value of the contracts increases/(decreases). |
Fair Value Measurements and C98
Fair Value Measurements and Credit Concentration (Net Asset and Liability Measured on Recurring Basis Level 3 Gain Loss Included in Earnings and Other Recurring Numeric Data) (Details) - Level 3 - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Net gains and losses on assets and liabilities [Abstract] | ||
Total gains (losses) included in earnings | $ (91) | $ (32) |
Recurring | Energy Commodities, Net | Wholesale energy | ||
Net gains and losses on assets and liabilities [Abstract] | ||
Total gains (losses) included in earnings | (80) | (77) |
Change in unrealized gains (losses) relating to positions still held at the reporting date | (7) | 50 |
Recurring | Energy Commodities, Net | Retail Energy | ||
Net gains and losses on assets and liabilities [Abstract] | ||
Total gains (losses) included in earnings | (2) | 23 |
Change in unrealized gains (losses) relating to positions still held at the reporting date | 29 | 37 |
Recurring | Energy Commodities, Net | Energy purchases | ||
Net gains and losses on assets and liabilities [Abstract] | ||
Total gains (losses) included in earnings | (9) | 22 |
Change in unrealized gains (losses) relating to positions still held at the reporting date | $ (6) | $ (4) |
Fair Value Measurements and C99
Fair Value Measurements and Credit Concentration (Nonrecurring Fair Value Measurements) (Details) - Nonrecurring - USD ($) $ in Millions | Nov. 30, 2015 | Sep. 30, 2015 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Sep. 30, 2015 | Dec. 31, 2013 | ||
Sapphire plants | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Pre-tax loss | $ 66 | |||||||||
Sapphire plants and C.P. Crane plant | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Pre-tax loss | $ 122 | |||||||||
Kerr Dam Project | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Pre-tax loss | $ 18 | $ 18 | [1],[2] | |||||||
Corette plant and emissions allowances | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Pre-tax loss | [2] | $ 65 | ||||||||
Carrying Amount | Sapphire plants | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Nonrecurring measurement asset value | [3] | 270 | ||||||||
Carrying Amount | Sapphire plants and C.P. Crane plant | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Nonrecurring measurement asset value | [3] | $ 388 | 388 | |||||||
Carrying Amount | Kerr Dam Project | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Nonrecurring measurement asset value | [1],[3] | $ 47 | 47 | 47 | ||||||
Carrying Amount | Corette plant and emissions allowances | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Nonrecurring measurement asset value | [3] | $ 65 | 65 | |||||||
Level 3 | Sapphire plants | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Nonrecurring measurement asset value | [4] | 204 | ||||||||
Fair value of net asset and (liability) | $ 204 | |||||||||
Level 3 | Sapphire plants and C.P. Crane plant | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Nonrecurring measurement asset value | [4] | 266 | 266 | |||||||
Fair value of net asset and (liability) | $ 266 | $ 266 | ||||||||
Level 3 | Kerr Dam Project | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Nonrecurring measurement asset value | [1] | 29 | 29 | 29 | ||||||
Fair value of net asset and (liability) | $ 29 | $ 29 | $ 29 | |||||||
Level 3 | Corette plant and emissions allowances | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Nonrecurring measurement asset value | 0 | 0 | ||||||||
Fair value of net asset and (liability) | $ 0 | $ 0 | ||||||||
Discounted Cash Flow | Minimum | Level 3 | Sapphire plants | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Proprietary model used to calculate plant value | [5] | 100.00% | ||||||||
Discounted Cash Flow | Minimum | Level 3 | Sapphire plants and C.P. Crane plant | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Proprietary model used to calculate plant value | [5] | 100.00% | ||||||||
Discounted Cash Flow | Minimum | Level 3 | Kerr Dam Project | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Proprietary model used to calculate plant value | [5] | 38.00% | ||||||||
Discounted Cash Flow | Minimum | Level 3 | Corette plant and emissions allowances | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Long-term forward price curves and capital expenditure projections | [5] | 100.00% | ||||||||
Discounted Cash Flow | Maximum | Level 3 | Sapphire plants | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Proprietary model used to calculate plant value | [5] | 100.00% | ||||||||
Discounted Cash Flow | Maximum | Level 3 | Sapphire plants and C.P. Crane plant | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Proprietary model used to calculate plant value | [5] | 100.00% | ||||||||
Discounted Cash Flow | Maximum | Level 3 | Kerr Dam Project | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Proprietary model used to calculate plant value | [5] | 38.00% | ||||||||
Discounted Cash Flow | Maximum | Level 3 | Corette plant and emissions allowances | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Long-term forward price curves and capital expenditure projections | [5] | 100.00% | ||||||||
Discounted Cash Flow | Weighted Average | Level 3 | Sapphire plants | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Proprietary model used to calculate plant value | [5] | 100.00% | ||||||||
Discounted Cash Flow | Weighted Average | Level 3 | Sapphire plants and C.P. Crane plant | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Proprietary model used to calculate plant value | [5] | 100.00% | ||||||||
Discounted Cash Flow | Weighted Average | Level 3 | Kerr Dam Project | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Proprietary model used to calculate plant value | [5] | 38.00% | ||||||||
Discounted Cash Flow | Weighted Average | Level 3 | Corette plant and emissions allowances | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||
Long-term forward price curves and capital expenditure projections | [5] | 100.00% | ||||||||
[1] | The Kerr Dam Project was included in the sale of the Talen Montana hydroelectric facilities and the assets were removed from the Balance Sheet. See Note 6 for additional information. | |||||||||
[2] | The impairment on the Kerr Dam Project is included in "Income (Loss) from Discontinued Operations (net of income taxes)" on the Statement of Income. The impairments on the C.P. Crane plant and the Sapphire plants are included in "Impairments" on the Statement of Income. | |||||||||
[3] | Represents carrying value before fair value measurement. | |||||||||
[4] | For the Sapphire plants, also reflects estimated cost to sell at September 30, 2015. | |||||||||
[5] | The range and weighted average represent the percentage of fair value derived from the unobservable inputs. |
Fair Value Measurements and 100
Fair Value Measurements and Credit Concentration (Financial Instruments Not Recorded at Fair Value and Credit Concentration) (Details) $ in Millions | Dec. 31, 2015USD ($)counterparty | Dec. 31, 2014USD ($) |
Credit Concentration Associated with Financial Instruments (Numeric) [Abstract] | ||
Gross credit exposure from energy trading partners | $ 574 | |
Net credit exposure to energy trading partners | 368 | |
Dollar exposure to top ten energy trading counterparties | $ 173 | |
Percentage exposure to top ten energy trading counterparties | 47.00% | |
Number of counterparties in top ten that have investment grade credit rating | counterparty | 9 | |
Percentage of top ten's exposure that consists of counterparties with investment grade credit rating | 90.00% | |
Carrying Amount | ||
Fair Value of Financial Instruments Not Recorded at Fair Value - Other | ||
Long-term debt | $ 4,203 | $ 2,218 |
Fair Value | ||
Fair Value of Financial Instruments Not Recorded at Fair Value - Other | ||
Long-term debt | $ 3,343 | $ 2,204 |
Derivative Instruments and H101
Derivative Instruments and Hedging Activities - Intro (Details) | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($)MW | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | ||
Commodity Price Risk (Non-trading) | |||||
Generation fleet capacity (in MW) | MW | 17,379 | ||||
Cash Flow Hedges | |||||
Net unrealized after-tax gains (losses) expected to be reclassified into earnings within 12 months related to commodity price risk cash flow hedge contracts | $ 12,000,000 | ||||
Commodity Price Risk Nontrading Economic Activity Numeric | |||||
Year of expiration of the maximum maturity date of economic activity derivative contracts | 2,020 | ||||
Wholesale energy | |||||
Pre-tax Gains (Losses) of Economic Activity (Details) | |||||
Pre-tax gain (loss) | $ 115,000,000 | [1] | $ 72,000,000 | $ (267,000,000) | |
Unrealized gain from change in valuation technique | $ 30,000,000 | ||||
Retail Energy | |||||
Pre-tax Gains (Losses) of Economic Activity (Details) | |||||
Pre-tax gain (loss) | (9,000,000) | 29,000,000 | 12,000,000 | ||
Fuel | |||||
Pre-tax Gains (Losses) of Economic Activity (Details) | |||||
Pre-tax gain (loss) | 15,000,000 | (27,000,000) | (4,000,000) | ||
Energy purchases | |||||
Pre-tax Gains (Losses) of Economic Activity (Details) | |||||
Pre-tax gain (loss) | 60,000,000 | [1] | (74,000,000) | $ 132,000,000 | |
Credit risk | |||||
Master Netting Arrangements | |||||
Obligation to return counterparty cash collateral under master netting arrangements | 11,000,000 | ||||
Cash collateral posted under master netting arrangements | $ 0 | 0 | |||
Price Risk Derivative | |||||
Pre-tax Gains (Losses) of Economic Activity (Details) | |||||
Net energy trading margins | $ 75,000,000 | ||||
[1] | In the third quarter of 2015, Talen Energy refined an input used in its valuation technique for certain PJM basis curves as observable inputs became available. This change resulted in the recording of a $30 million net unrealized gain, primarily reflected in "Wholesale energy" revenue on the Statement of Income. |
Derivative Instruments and H102
Derivative Instruments and Hedging Activities - Commodity Volumes (Details) | Dec. 31, 2015MMBTUMW-MMWhTbbl | [1] |
Power | Sales | 2016 | ||
Derivative [Line Items] | ||
Volumes (in MWh, MW-Month, MMBtu) | MWh | 36,420,569 | |
Power | Sales | 2017 | ||
Derivative [Line Items] | ||
Volumes (in MWh, MW-Month, MMBtu) | MWh | 4,474,975 | |
Power | Sales | 2018 | ||
Derivative [Line Items] | ||
Volumes (in MWh, MW-Month, MMBtu) | MWh | 568,082 | |
Power | Sales | Thereafter | ||
Derivative [Line Items] | ||
Volumes (in MWh, MW-Month, MMBtu) | MWh | 334,101 | |
Capacity | Sales | 2016 | ||
Derivative [Line Items] | ||
Volumes (in MWh, MW-Month, MMBtu) | MW-M | 5,953 | |
Capacity | Purchases | 2017 | ||
Derivative [Line Items] | ||
Volumes (in MWh, MW-Month, MMBtu) | MW-M | 6 | |
Capacity | Purchases | 2018 | ||
Derivative [Line Items] | ||
Volumes (in MWh, MW-Month, MMBtu) | MW-M | 3 | |
Capacity | Purchases | Thereafter | ||
Derivative [Line Items] | ||
Volumes (in MWh, MW-Month, MMBtu) | MW-M | 0 | |
Gas | Purchases | 2016 | ||
Derivative [Line Items] | ||
Volumes (in MWh, MW-Month, MMBtu) | MMBTU | 146,474,333 | |
Gas | Purchases | 2017 | ||
Derivative [Line Items] | ||
Volumes (in MWh, MW-Month, MMBtu) | MMBTU | 17,898,993 | |
Gas | Purchases | 2018 | ||
Derivative [Line Items] | ||
Volumes (in MWh, MW-Month, MMBtu) | MMBTU | 14,987,372 | |
Gas | Purchases | Thereafter | ||
Derivative [Line Items] | ||
Volumes (in MWh, MW-Month, MMBtu) | MMBTU | 3,063,441 | |
FTRs | Purchases | 2016 | ||
Derivative [Line Items] | ||
Volumes (in MWh, MW-Month, MMBtu) | MW-M | 8,724 | |
FTRs | Purchases | 2017 | ||
Derivative [Line Items] | ||
Volumes (in MWh, MW-Month, MMBtu) | MW-M | 200 | |
FTRs | Purchases | 2018 | ||
Derivative [Line Items] | ||
Volumes (in MWh, MW-Month, MMBtu) | MW-M | 0 | |
FTRs | Purchases | Thereafter | ||
Derivative [Line Items] | ||
Volumes (in MWh, MW-Month, MMBtu) | MW-M | 0 | |
Oil | Purchases | 2016 | ||
Derivative [Line Items] | ||
Volumes (in barrels) | bbl | 65,559 | |
Oil | Purchases | 2017 | ||
Derivative [Line Items] | ||
Volumes (in barrels) | bbl | 0 | |
Oil | Purchases | 2018 | ||
Derivative [Line Items] | ||
Volumes (in barrels) | bbl | 0 | |
Oil | Purchases | Thereafter | ||
Derivative [Line Items] | ||
Volumes (in barrels) | bbl | 0 | |
CRRs | Purchases | 2016 | ||
Derivative [Line Items] | ||
Volumes (in MWh, MW-Month, MMBtu) | MWh | 2,491,444 | |
CRRs | Purchases | 2017 | ||
Derivative [Line Items] | ||
Volumes (in MWh, MW-Month, MMBtu) | MWh | 538,584 | |
CRRs | Purchases | 2018 | ||
Derivative [Line Items] | ||
Volumes (in MWh, MW-Month, MMBtu) | MWh | 0 | |
CRRs | Purchases | Thereafter | ||
Derivative [Line Items] | ||
Volumes (in MWh, MW-Month, MMBtu) | MWh | 0 | |
Emission Allowance | Purchases | 2016 | ||
Derivative [Line Items] | ||
Volumes (in tons) | T | 75,617 | |
Emission Allowance | Purchases | 2017 | ||
Derivative [Line Items] | ||
Volumes (in tons) | T | 0 | |
Emission Allowance | Purchases | 2018 | ||
Derivative [Line Items] | ||
Volumes (in tons) | T | 0 | |
Emission Allowance | Purchases | Thereafter | ||
Derivative [Line Items] | ||
Volumes (in tons) | T | 0 | |
[1] | Volumes for option contracts factor in the probability of an option being exercised and may be less than the notional amount of the optio |
Derivative Instruments and H103
Derivative Instruments and Hedging Activities - Fair Values (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | $ 693 | $ 1,318 |
Liability value | 539 | 1,217 |
Not Designated as Hedging Instrument | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 693 | 1,318 |
Liability value | 539 | 1,217 |
Not Designated as Hedging Instrument | Current Assets | Energy Commodities, net | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 562 | 1,079 |
Not Designated as Hedging Instrument | Noncurrent Assets | Energy Commodities, net | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Asset value | 131 | 239 |
Not Designated as Hedging Instrument | Current Liabilities | Energy Commodities, net | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | 431 | 1,024 |
Not Designated as Hedging Instrument | Noncurrent Liabilities | Energy Commodities, net | ||
Fair Values by Balance Sheet Location [Abstract] | ||
Liability value | $ 108 | $ 193 |
Derivative Instruments and H104
Derivative Instruments and Hedging Activities - Gains and Losses (Details) - Energy Commodities, net - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flow Hedges | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) reclassified from AOCI into income (effective portion) | $ 31 | $ 42 | $ 207 |
Cash Flow Hedges | Wholesale energy | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) reclassified from AOCI into income (effective portion) | (3) | 1 | 240 |
Cash Flow Hedges | Energy purchases | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) reclassified from AOCI into income (effective portion) | 33 | 31 | (58) |
Cash Flow Hedges | Depreciation | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) reclassified from AOCI into income (effective portion) | 1 | 2 | 2 |
Cash Flow Hedges | Discontinued Operations | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) reclassified from AOCI into income (effective portion) | 0 | 8 | 23 |
Not Designated as Hedging Instrument | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) on derivative, net | 306 | (334) | 72 |
Not Designated as Hedging Instrument | Wholesale energy | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) on derivative, net | 742 | (505) | (9) |
Not Designated as Hedging Instrument | Retail Energy | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) on derivative, net | 22 | 30 | 25 |
Not Designated as Hedging Instrument | Energy purchases | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) on derivative, net | (452) | 165 | 40 |
Not Designated as Hedging Instrument | Fuel | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) on derivative, net | (6) | (30) | 2 |
Not Designated as Hedging Instrument | Discontinued Operations | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) on derivative, net | $ 0 | $ 6 | $ 14 |
Derivative Instruments and H105
Derivative Instruments and Hedging Activities - Offsetting Derivative Instruments and Credit Risk-Related Features (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Assets | ||
Gross | $ 693 | $ 1,318 |
Eligible for Offset, Derivative Instruments | 437 | 1,060 |
Eligible for Offset, Cash Collateral Received | 74 | 10 |
Net | 182 | 248 |
Liabilities | ||
Gross | 539 | 1,217 |
Eligible for Offset, Derivative Instruments | 437 | 1,060 |
Eligible for Offset, Cash Collateral Pledged | 30 | 58 |
Net | 72 | $ 99 |
Derivative, Credit Risk Related Contingent Features [Abstract] | ||
Aggregate fair value of derivative instruments in a net liability position | 70 | |
Aggregate fair value of collateral posted on these derivative instruments | 71 | |
Aggregate fair value of additional collateral requirements, primarily related to further adequate assurance features | $ 34 |
Goodwill and Other Asset Imp106
Goodwill and Other Asset Impairments (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |||
Goodwill [Line Items] | |||||
Carrying value | $ 8,587,000,000 | $ 6,436,000,000 | |||
Goodwill [Roll Forward] | |||||
Goodwill, beginning balance | 72,000,000 | 86,000,000 | |||
Goodwill recognized during the period | 393,000,000 | [1] | 0 | ||
Allocation to discontinued operations | 0 | (14,000,000) | [2] | ||
Impairment | (465,000,000) | 0 | |||
Goodwill, ending balance | 0 | 72,000,000 | |||
Accumulated impairment related to goodwill | 465,000,000 | 0 | |||
Operating Segments | East | |||||
Goodwill [Roll Forward] | |||||
Goodwill, beginning balance | 72,000,000 | 72,000,000 | |||
Goodwill recognized during the period | 393,000,000 | 0 | |||
Allocation to discontinued operations | 0 | 0 | |||
Impairment | $ (466,000,000) | (465,000,000) | 0 | ||
Goodwill, ending balance | 0 | 72,000,000 | |||
Operating Segments | West | |||||
Goodwill [Roll Forward] | |||||
Goodwill, beginning balance | 0 | 14,000,000 | |||
Goodwill recognized during the period | 0 | 0 | |||
Allocation to discontinued operations | 0 | (14,000,000) | [2] | ||
Impairment | 0 | 0 | |||
Goodwill, ending balance | 0 | $ 0 | |||
Coal-Fired Generation Assets | |||||
Goodwill [Line Items] | |||||
Carrying value | $ 3,000,000,000 | ||||
[1] | Recognized as a result of the acquisition of RJS Power. See Note 6 for additional information. | ||||
[2] | Goodwill allocated to the sale of the Talen Montana hydroelectric generating facilities and written off. See Note 6 for additional information related to the sale. |
Other Intangible Assets (Detail
Other Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross carrying amount | $ 350 | $ 297 | ||
Accumulated amortization | 36 | 33 | ||
Land And Transmission Rights | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross carrying amount | 16 | 17 | ||
Accumulated amortization | 13 | 14 | ||
Emission Allowances/RECs | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross carrying amount | [1] | 9 | 10 | |
Amortization expense | 44 | 24 | $ 23 | |
Licenses And Other | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross carrying amount | [2],[3] | 325 | 270 | |
Accumulated amortization | [2],[3] | 23 | 19 | |
Pipeline Lease | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross carrying amount | $ 28 | |||
Amortization period | 14 years | |||
Ash Site Permit | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross carrying amount | $ 16 | |||
Amortization period | 22 years | |||
Other Intangible Assets Excluding Emission Allowances/RECs | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 4 | $ 4 | $ 5 | |
[1] | Includes emission allowances and RECs that are expensed when consumed or sold; therefore, there is no accumulated amortization. | |||
[2] | "Other" also includes intangibles acquired as part of the RJS Power acquisition including $28 million for a pipeline lease that is being amortized over a 14 year period and $16 million for an ash site permit that is being amortized over a 22 year period. | |||
[3] | "Other" includes costs for the development of licenses, the most significant of which is the COLA. Amortization of these costs begins when the related asset is placed in service. See Note 6 for additional information on the COLA. |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Balance at Beginning of Period | $ 425 | $ 404 | |
Accretion expense | 35 | 32 | |
Changes in estimate of cash flow or settlement date | 25 | [1] | (16) |
Obligations assumed in RJS Power acquisition | 18 | 0 | |
Obligations incurred | 2 | 13 | |
Obligations settled | (4) | (8) | |
Balance at End of Period | 501 | $ 425 | |
Changes in estimate of cash flow or settlement date, new CCR rule | $ 41 | ||
[1] | Includes increases in 2015 of $41 million as a result of a new CCR rule. Further changes to the AROs may be required as estimates are refined and analysis of the rule continues. |
Available-for-Sale Securitie109
Available-for-Sale Securities (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Fiscal Year Maturity [Abstract] | ||||
Amortized cost - maturity less than 1 year | $ 7 | |||
Amortized cost - maturity between 1 and 5 years | 101 | |||
Amortized cost - maturity between 6 and 10 years | 67 | |||
Amortized cost - maturity in excess of 10 years | 61 | |||
Amortized cost total | 236 | |||
Fair value - maturity less than 1 year | 7 | |||
Fair value - maturity between 1 and 5 years | 102 | |||
Fair value - maturity between 6 and 10 years | 69 | |||
Fair value - maturity in excess of 10 years | 65 | |||
Fair value total | 243 | |||
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract] | ||||
Proceeds from sales of NDT securities | 180 | $ 154 | $ 144 | |
Other proceeds from sales | 2 | 9 | 0 | |
Gross realized gains | [1] | 26 | 23 | 17 |
Gross realized losses | [1] | 22 | 10 | $ 7 |
NDT Funds | ||||
Available-for-sale Securities, Balance Sheet, Reported Amounts [Abstract] | ||||
Amortized cost | 538 | 522 | ||
Gross unrealized gains | 413 | 428 | ||
Gross unrealized losses | 0 | 0 | ||
Fair value | $ 951 | 950 | ||
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract] | ||||
Percentage of shortfall Susquehanna Nuclear would be obligated to fund | 90.00% | |||
NDT Funds | Cash and cash equivalents | ||||
Available-for-sale Securities, Balance Sheet, Reported Amounts [Abstract] | ||||
Amortized cost | $ 11 | 19 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | 0 | 0 | ||
Fair value | 11 | 19 | ||
NDT Funds | Equity securities | ||||
Available-for-sale Securities, Balance Sheet, Reported Amounts [Abstract] | ||||
Amortized cost | 297 | 283 | ||
Gross unrealized gains | 406 | 417 | ||
Gross unrealized losses | 0 | 0 | ||
Fair value | 703 | 700 | ||
NDT Funds | Debt securities | ||||
Available-for-sale Securities, Balance Sheet, Reported Amounts [Abstract] | ||||
Amortized cost | 230 | 218 | ||
Gross unrealized gains | 7 | 11 | ||
Gross unrealized losses | 0 | 0 | ||
Fair value | 237 | 229 | ||
NDT Funds | Receivables/payables, net | ||||
Available-for-sale Securities, Balance Sheet, Reported Amounts [Abstract] | ||||
Amortized cost | 0 | 2 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | 0 | 0 | ||
Fair value | 0 | 2 | ||
Auction Rate Securities | ||||
Available-for-sale Securities, Balance Sheet, Reported Amounts [Abstract] | ||||
Amortized cost | 6 | 8 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | 0 | 0 | ||
Fair value | $ 6 | $ 8 | ||
[1] | Excludes the impact of other-than-temporary impairment charges recognized on the Statements of Income. |
Accumulated Other Comprehens110
Accumulated Other Comprehensive Income (Loss) - After-tax Changes by Component (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | $ (23) | $ 77 | $ 48 |
Amounts arising during the period | 37 | (77) | 140 |
Reclassifications from accumulated other comprehensive income | (40) | (23) | (111) |
Total other comprehensive income (loss) | (3) | (100) | 29 |
Balance at end of period | (26) | (23) | 77 |
Available- for-sale securities | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | 202 | 173 | 112 |
Amounts arising during the period | (6) | 35 | 67 |
Reclassifications from accumulated other comprehensive income | (2) | (6) | (6) |
Total other comprehensive income (loss) | (8) | 29 | 61 |
Balance at end of period | 194 | 202 | 173 |
Qualifying derivatives | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | 63 | 88 | 211 |
Amounts arising during the period | 0 | 0 | 0 |
Reclassifications from accumulated other comprehensive income | (19) | (25) | (123) |
Total other comprehensive income (loss) | (19) | (25) | (123) |
Balance at end of period | 44 | 63 | 88 |
Prior service costs | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | 7 | (4) | (10) |
Amounts arising during the period | (3) | 8 | 2 |
Reclassifications from accumulated other comprehensive income | (1) | 3 | 4 |
Total other comprehensive income (loss) | (4) | 11 | 6 |
Balance at end of period | 3 | 7 | (4) |
Actuarial gain (loss) | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | (295) | (180) | (265) |
Amounts arising during the period | 46 | (120) | 71 |
Reclassifications from accumulated other comprehensive income | (18) | 5 | 14 |
Total other comprehensive income (loss) | 28 | (115) | 85 |
Balance at end of period | $ (267) | $ (295) | $ (180) |
Accumulated Other Comprehens111
Accumulated Other Comprehensive Income (Loss) - Income (Expense) Effect of Reclassifications (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Affected Line Item on the Statements of Income [Line Items] | |||||||||||
Wholesale energy | $ 2,828 | $ 2,653 | $ 2,890 | ||||||||
Energy purchases | (676) | (1,054) | (1,153) | ||||||||
Other Income (Expense) - net | (118) | 30 | 32 | ||||||||
Total Pre-tax | (368) | 303 | (420) | ||||||||
Income Taxes | 27 | (116) | 159 | ||||||||
Income (Loss) from Continuing Operations After Income Taxes | $ (62) | $ (401) | $ 26 | $ 96 | $ 149 | $ 94 | $ 2 | $ (58) | (341) | 187 | $ (261) |
Reclassification out of AOCI | |||||||||||
Affected Line Item on the Statements of Income [Line Items] | |||||||||||
Income (Loss) from Continuing Operations After Income Taxes | 40 | 23 | |||||||||
Reclassification out of AOCI | Available-for-sale securities | |||||||||||
Affected Line Item on the Statements of Income [Line Items] | |||||||||||
Other Income (Expense) - net | 4 | 13 | |||||||||
Income Taxes | (2) | (7) | |||||||||
Income (Loss) from Continuing Operations After Income Taxes | 2 | 6 | |||||||||
Reclassification out of AOCI | Qualifying derivatives | |||||||||||
Affected Line Item on the Statements of Income [Line Items] | |||||||||||
Total Pre-tax | 31 | 42 | |||||||||
Income Taxes | (12) | (17) | |||||||||
Income (Loss) from Continuing Operations After Income Taxes | 19 | 25 | |||||||||
Reclassification out of AOCI | Qualifying derivatives | Commodity contracts | |||||||||||
Affected Line Item on the Statements of Income [Line Items] | |||||||||||
Wholesale energy | (3) | 1 | |||||||||
Energy purchases | 33 | 31 | |||||||||
Discontinued operations | 0 | 8 | |||||||||
Other Income (Expense) - net | 1 | 2 | |||||||||
Reclassification out of AOCI | Defined benefit plans | |||||||||||
Affected Line Item on the Statements of Income [Line Items] | |||||||||||
Total Pre-tax | 30 | (13) | |||||||||
Income Taxes | (11) | 5 | |||||||||
Income (Loss) from Continuing Operations After Income Taxes | 19 | (8) | |||||||||
Reclassification out of AOCI | Defined benefit plans | Prior service costs | |||||||||||
Affected Line Item on the Statements of Income [Line Items] | |||||||||||
Total Pre-tax | 1 | (4) | |||||||||
Reclassification out of AOCI | Defined benefit plans | Net actuarial loss | |||||||||||
Affected Line Item on the Statements of Income [Line Items] | |||||||||||
Total Pre-tax | $ 29 | $ (9) |
Schedule I - Talen Energy Co112
Schedule I - Talen Energy Corporation - Income Statement (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 7 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Condensed Financial Statements, Captions [Line Items] | |||||||||||||
Operating Revenues | $ 1,122 | $ 1,320 | $ 948 | $ 1,091 | $ 1,353 | $ 1,192 | $ 1,090 | $ 946 | $ 4,481 | $ 4,581 | $ 4,495 | ||
Operating Expenses | 4,520 | 4,184 | 4,788 | ||||||||||
Operating Income (Loss) | 94 | (346) | 35 | 178 | 271 | 189 | 16 | (79) | (39) | 397 | (293) | ||
Other Income (Expense) - net | |||||||||||||
Total Other Income (Expense) - net | (118) | 30 | 32 | ||||||||||
Net Income (Loss) Attributable to Member | $ (62) | $ (401) | $ 26 | $ 96 | $ 362 | $ 101 | $ 13 | $ (66) | (341) | 410 | (230) | ||
Comprehensive Income (Loss) Attributable to Talen Energy Corporation Stockholders | $ (344) | $ 310 | $ (201) | ||||||||||
Earnings Per Share of Common Stock: | |||||||||||||
Basic (in dollars per share) | $ (0.48) | $ (3.12) | $ 0.26 | $ 1.15 | $ 4.33 | $ 1.21 | $ 0.16 | $ (0.79) | $ (3.10) | $ 4.91 | $ (2.75) | ||
Diluted (in dollars per share) | $ (0.48) | $ (3.12) | $ 0.26 | $ 1.15 | $ 4.33 | $ 1.21 | $ 0.16 | $ (0.79) | $ (3.10) | $ 4.91 | $ (2.75) | ||
Weighted-Average Shares of Common Stock Outstanding (in thousands) | |||||||||||||
Basic (in shares) | 109,898 | 83,524 | 83,524 | ||||||||||
Diluted (in shares) | 109,898 | 83,524 | 83,524 | ||||||||||
Talen Energy Corporation | |||||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||||
Operating Revenues | [1] | $ 0 | $ 0 | ||||||||||
Operating Expenses | [1] | 0 | 0 | ||||||||||
Operating Income (Loss) | [1] | 0 | 0 | ||||||||||
Other Income (Expense) - net | |||||||||||||
Equity in earnings of subsidiaries | [1] | 0 | (373) | ||||||||||
Total Other Income (Expense) - net | [1] | 0 | (373) | ||||||||||
Net Income (Loss) Attributable to Member | [1] | 0 | (373) | ||||||||||
Comprehensive Income (Loss) Attributable to Talen Energy Corporation Stockholders | [1] | $ 0 | $ (449) | ||||||||||
Earnings Per Share of Common Stock: | |||||||||||||
Basic (in dollars per share) | [1] | $ 0 | $ (2.90) | ||||||||||
Diluted (in dollars per share) | [1] | $ 0 | $ (2.90) | ||||||||||
Weighted-Average Shares of Common Stock Outstanding (in thousands) | |||||||||||||
Basic (in shares) | [1],[2] | 0 | 128,509 | ||||||||||
Diluted (in shares) | [1],[2] | 0 | 128,509 | ||||||||||
[1] | Talen Energy Corporation was incorporated in June 2014 and its business operations began in June 2015 after the completion of its spinoff from PPL. Therefore, the 2015 results are primarily from June 1 to December 31, while the 2014 results are from the same period. See Note 1 to the Unconsolidated Financial Statements for additional information. | ||||||||||||
[2] | Weighted average shares were calculated for the seven month period from June 1, 2015 to December 31, 2015. |
Schedule I - Talen Energy Co113
Schedule I - Talen Energy Corporation - Cash Flows (Details) - USD ($) $ in Millions | 7 Months Ended | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Cash Flows from Operating Activities | |||||
Net cash provided by (used in) operating activities | $ 768 | $ 462 | $ 410 | ||
Cash Flows from Investing Activities | |||||
Net cash provided by (used in) investing activities | (915) | 497 | (631) | ||
Cash Flows from Financing Activities | |||||
Net cash provided by (used in) financing activities | (64) | (846) | 47 | ||
Net Increase (Decrease) in Cash and Cash Equivalents | (211) | 113 | (174) | ||
Cash and Cash Equivalents at Beginning of Period | 352 | 239 | 413 | ||
Cash and Cash Equivalents at End of Period | $ 352 | 141 | 352 | $ 239 | |
Talen Energy Corporation | |||||
Cash Flows from Operating Activities | |||||
Net cash provided by (used in) operating activities | [1] | 0 | 0 | ||
Cash Flows from Investing Activities | |||||
Net cash provided by (used in) investing activities | [1] | 0 | 0 | ||
Cash Flows from Financing Activities | |||||
Net cash provided by (used in) financing activities | [1] | 0 | 0 | ||
Net Increase (Decrease) in Cash and Cash Equivalents | [1] | 0 | 0 | ||
Cash and Cash Equivalents at Beginning of Period | [1] | 0 | 0 | ||
Cash and Cash Equivalents at End of Period | [1] | $ 0 | $ 0 | $ 0 | |
[1] | Talen Energy Corporation was incorporated in June 2014 and its business operations began in June 2015 after the completion of its spinoff from PPL. Therefore, the 2015 results are primarily from June 1 to December 31, while the 2014 results are from the same period. See Note 1 to the Unconsolidated Financial Statements for additional information. |
Schedule I - Talen Energy Co114
Schedule I - Talen Energy Corporation - Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
Investments | ||||||
Total Assets | $ 12,826 | $ 10,760 | ||||
Equity | ||||||
Common Stock - $0.001 par value | [1] | 0 | 0 | |||
Additional paid-in capital | 4,702 | 0 | ||||
Accumulated deficit | (373) | 0 | ||||
Accumulated other comprehensive income (loss) | (26) | (23) | $ 77 | $ 48 | ||
Total Equity | 4,303 | 3,907 | ||||
Total Liabilities and Equity | 12,826 | 10,760 | ||||
Talen Energy Corporation | ||||||
Investments | ||||||
Affiliated companies at equity | 4,303 | 0 | ||||
Total Assets | 4,303 | 0 | ||||
Equity | ||||||
Common Stock - $0.001 par value | 0 | [2] | 0 | |||
Additional paid-in capital | 4,702 | 0 | ||||
Accumulated deficit | (373) | 0 | ||||
Accumulated other comprehensive income (loss) | (26) | 0 | ||||
Total Equity | 4,303 | 0 | ||||
Total Liabilities and Equity | $ 4,303 | $ 0 | ||||
[1] | 1,000,000 shares authorized; 128,509 shares issued and outstanding at December 31, 2015. | |||||
[2] | 1,000,000 shares authorized; 128,509 shares issued and outstanding at December 31, 2015. |
Schedule I - Talen Energy Co115
Schedule I - Talen Energy Corporation - Balance Sheet, Additional Disclosures (Details) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Condensed Financial Statements, Captions [Line Items] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | |
Common stock, shares issued (in shares) | 128,509,000 | |
Common stock, shares outstanding (in shares) | 128,509,000 | |
Talen Energy Corporation | ||
Condensed Financial Statements, Captions [Line Items] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 0 |
Common stock, shares issued (in shares) | 128,509 |
Quarterly Financial Data (Detai
Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Interim Period, Costs Not Allocable [Line Items] | |||||||||||
Operating Revenues | $ 1,122 | $ 1,320 | $ 948 | $ 1,091 | $ 1,353 | $ 1,192 | $ 1,090 | $ 946 | $ 4,481 | $ 4,581 | $ 4,495 |
Operating income (loss) | 94 | (346) | 35 | 178 | 271 | 189 | 16 | (79) | (39) | 397 | (293) |
Income (Loss) from continuing operations after income taxes | (62) | (401) | 26 | 96 | 149 | 94 | 2 | (58) | (341) | 187 | (261) |
Income (Loss) from Discontinued Operations (net of income taxes) | 0 | 0 | 0 | 0 | 213 | 7 | 11 | (8) | 0 | 223 | 32 |
Net Income (Loss) Attributable to Parent | $ (62) | $ (401) | $ 26 | $ 96 | $ 362 | $ 101 | $ 13 | $ (66) | $ (341) | $ 410 | $ (230) |
Basic (in dollars per share) | $ (0.48) | $ (3.12) | $ 0.26 | $ 1.15 | $ 1.78 | $ 1.13 | $ 0.03 | $ (0.69) | $ (3.10) | $ 2.24 | $ (3.13) |
Diluted (in dollars per share) | (0.48) | (3.12) | 0.26 | 1.15 | 1.78 | 1.13 | 0.03 | (0.69) | (3.10) | 2.24 | (3.13) |
Basic (in dollars per share) | (0.48) | (3.12) | 0.26 | 1.15 | 4.33 | 1.21 | 0.16 | (0.79) | (3.10) | 4.91 | (2.75) |
Diluted (in dollars per share) | $ (0.48) | $ (3.12) | $ 0.26 | $ 1.15 | $ 4.33 | $ 1.21 | $ 0.16 | $ (0.79) | $ (3.10) | $ 4.91 | $ (2.75) |
Talen Montana | |||||||||||
Interim Period, Costs Not Allocable [Line Items] | |||||||||||
Gain | $ 137 | ||||||||||
Previously Reported | |||||||||||
Interim Period, Costs Not Allocable [Line Items] | |||||||||||
Operating Revenues | $ 1,419 | $ 1,065 | $ 946 | 2,083 | $ 1,601 | $ 1,007 | $ (955) | ||||
Operating income (loss) | (246) | 34 | |||||||||
Income (Loss) from continuing operations after income taxes | (339) | 25 | |||||||||
Income (Loss) from Discontinued Operations (net of income taxes) | (62) | 1 | |||||||||
Scenario, Adjustment | |||||||||||
Interim Period, Costs Not Allocable [Line Items] | |||||||||||
Operating Revenues | (135) | (125) | $ 145 | (730) | (409) | 83 | 1,901 | ||||
Scenario, Adjustment | Sapphire assets | |||||||||||
Interim Period, Costs Not Allocable [Line Items] | |||||||||||
Operating Revenues | 36 | 8 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||
Operating income (loss) | (100) | 1 | |||||||||
Income (Loss) from continuing operations after income taxes | (62) | 1 | |||||||||
Income (Loss) from Discontinued Operations (net of income taxes) | $ 62 | $ (1) |
Uncategorized Items - tln-20151
Label | Element | Value | |
Retained Earnings [Member] | |||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | $ (373,000,000) | |
Predecessor Member's Equity [Member] | |||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | $ 32,000,000 | [1] |
[1] | Upon consummation of the spinoff on June 1, 2015, Talen Energy Supply's predecessor member's equity balance was transferred to Talen Energy Corporation's "Additional paid-in capital." See Note 1 for additional information on the spinoff. |