Talen Energy Corp

Recent Developments

PJM 2026/2027 Base Residual Auction

In July 2025, PJM announced the results of the 2026/2027 PJM BRA. Talen cleared 6,702 MWs at a price of $329.17/MWd for the MAAC, PPL, and PSEG locational deliverability areas.

See “—Factors Affecting Our Financial Condition and Results of Operations—Capacity Markets” for additional information.

Freedom and Guernsey Acquisitions

In July 2025, we entered into definitive agreements to acquire Caithness Energy’s 1,045 MW (summer rating) Freedom Energy Center in Pennsylvania and 1,836 MW (summer rating) Guernsey Power Station in Ohio, both gas fired combined cycle plants located within the PJM power market, for an aggregate gross purchase price of approximately $3.8 billion (subject to working capital and other customary adjustments), or $3.5 billion after adjusting for estimated tax benefits. We expect to issue approximately $3.8 billion in new debt to fund the Freedom and Guernsey Acquisitions.

The addition of these assets to Talen’s portfolio will increase our generating capacity by approximately 3 GW and is expected to enhance our ability to offer reliable, scalable, grid-supported, and regionally diverse low-carbon capacity to hyperscale data centers and other large commercial off-takers. Additionally, as these facilities have an average heat rate of 6,550 Btu/kWh, the Freedom and Guernsey Acquisitions will provide the Company with incremental baseload generation and cash flow diversification. The presence of these facilities in the PJM market complements our existing commercial and marketing capabilities, and their strategic location adjacent to the Marcellus and Utica shale formations provides ample natural gas supplies and reliable access to natural gas pipeline infrastructure and interconnects.

The transactions are subject to regulatory approvals and the satisfaction of other customary closing conditions, and are both expected to close in the fourth quarter 2025. The relevant regulatory filings have all been made and are now pending at the agencies.

See Note 17 to the Interim Financial Statements for additional information on the Freedom and Guernsey Acquisitions and “Part II, Item 1A. Risk Factors” of this Report for a discussion of the associated risks.

The foregoing description of the Purchase Agreements and the transactions contemplated thereby is only a summary, does not purport to be complete, and is qualified in its entirety by reference to the full text of the Purchase Agreements, copies of which are attached as Exhibits 2.1 and 2.2 to this Report. The Purchase Agreements are being filed only to provide investors with information regarding their terms and are not intended to provide any other factual information about the parties thereto. Investors should not rely on the representations, warranties, or covenants in the Purchase Agreements, which may be subject to important limitations and qualifications, and which may change after the date of the Purchase Agreements, as characterizations of the actual state of facts or condition of the Company, the sellers, or any of their respective subsidiaries or affiliates.

Expanded AWS PPA

In June 2025, we entered into a new retail PPA agreement with AWS, expanding, and eventually replacing, the existing AWS PPA. The existing Susquehanna co-located load arrangement between Talen and AWS will transition to a “front-of-the-meter” arrangement after the completion of transmission reconfiguration projects expected to occur in Spring 2026, concurrent with Susquehanna’s annual refueling outage. Under the terms of the revised AWS PPA, Talen Energy Marketing will act as the retail electric generation supplier to AWS and PPL Electric Utilities will be responsible for transmission and delivery. At the full contract quantity, AWS is expected to receive 1,920 MW of power through 2042 for operations that support AI and other cloud technologies at the AWS Data Campus. The power delivery schedule will ramp over time, expecting to achieve the full volume no later than 2032. Talen and AWS will also explore building small modular reactors within Talen’s Pennsylvania footprint and pursue expanding Susquehanna’s energy output through uprates, with the intent to add net-new energy to the PJM grid.

Camden and Dartmouth Sales

In June 2025, we entered into a purchase and sale agreement to sell the Camden and Dartmouth generation facilities for an aggregate $32 million in cash, subject to customary working capital adjustments and an economic effective date of June 1, 2025. FERC approval for the sale was received in August 2025 and the transaction is expected to close in the second half of 2025.

See Note 17 to the Interim Financial Statements for additional information.

RMR Arrangements

In May 2025, the FERC approved the terms under which Talen will operate Brandon Shores and H.A. Wagner until May 31, 2029, beyond their previously-scheduled May 31, 2025 retirement dates. Under the RMR agreement, Brandon Shores Units 1 and 2 and H.A. Wagner Units 3 and 4 will remain in service and provide power necessary to maintain grid and transmission reliability in and around the City of Baltimore until transmission upgrades to provide reliable power to the area from other sources are complete. Beginning June 1, 2025, we expect to receive $145 million annually for Brandon Shores and $35 million for H.A. Wagner, inclusive of some performance incentives.

See Note 7 to the Interim Financial Statements for additional information.