Property, Plant, and Equipment

6 Months Ended

Jun. 30, 2024

Property, Plant and Equipment [Abstract]

8. Property, Plant and Equipment


		Successor
		June 30, 2024						December 31, 2023
	Estimated Useful Life (years)	Gross Value		Accumulated Provision		Carrying Value		Gross Value		Accumulated Provision		Carrying Value
Electric generation	3-27	$	3,015	$	(197)	$	2,818	$	3,178	$	(109)	$	3,069
Nuclear fuel	1-6	322		(107)		215		228		(55)		173
Other property and equipment	1-20	146		(30)		116		357		(21)		336
Intangible assets	2-26	1		—		1		1		—		1
Capitalized software	1-5	6		(2)		4		6		(1)		5
Construction work in progress		96		—		96		255		—		255
Property, plant and equipment, net		$	3,586	$	(336)	$	3,250	$	4,025	$	(186)	$	3,839

The components of “Depreciation, amortization and accretion” presented on the Consolidated Statements of Operations for the periods were:


	Successor				Predecessor		Successor				Predecessor
	Three Months Ended June 30, 2024		May 18 through June 30, 2023		April 1 through May 17, 2023		Six Months Ended June 30, 2024		May 18 through June 30, 2023		January 1 through May 17, 2023
Depreciation expense (a)	$	56	$	23	$	58	$	116	$	23	$	173
Amortization expense (b)	4		1		1		6		1		4
Accretion expense (c)	15		4		9		28		4		24
Other	—		—		—		—		—		(1)
Depreciation, amortization, and accretion	$	75	$	28	$	68	$	150	$	28	$	200

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(a)Electric generation and other property and equipment.

(b)Intangible assets and capitalized software.

(c)ARO and accrued environmental cost accretion. See Note 9 for additional information.

The cost of nuclear fuel is presented as “Nuclear fuel amortization” on the Consolidated Statements of Operations.

Reliability Impact Assessments

Reliability Impact Assessments. In 2023, Talen provided notifications to PJM it intends to deactivate electric generation at both Brandon Shores and H.A. Wagner on June 1, 2025. PJM has notified Talen that the generation units at each facility are needed for reliability. In April 2024, cost-of-service rate schedules covering the period of June 1, 2025 through December 31, 2028 were filed at FERC for the continued Reliability-Must-Run operation and provision of service from Brandon Shores Units 1 and 2 and H.A Wagner Units 3 and 4. Each of the filed rate schedules sets forth the terms, conditions, and cost-based rates under which the applicable generation facility will agree to continue to operate its generation units. In June 2024: (i) FERC accepted each rate schedule, subject to refund; (ii) an administrative settlement judge was appointed; and (iii) settlement proceedings commenced. No assurance can be provided as to when, if at all, final rate schedules for each generation facility will be approved by FERC or how the rate schedules and resulting revenues may ultimately be modified in the course of settlement judge procedures, or, should they be necessary, in the course of any subsequent evidentiary hearing procedures.

2023 Impairment

Brandon Shores Asset Group. Brandon Shores is required by contract and permit to cease coal combustion by December 31, 2025. In the first quarter of 2023, Talen canceled its plan to convert Brandon Shores to an oil combustion facility due to an increase in expected conversion costs. This decision triggered a recoverability assessment of the carrying value of the Brandon Shores asset group.

The recoverability analysis indicated that the Brandon Shores asset group carrying value exceeded its future estimated undiscounted cash flows, which required an impairment charge to amend the asset group’s carrying value of its property, plant and equipment to its estimated fair value. Accordingly, for the period from January 1 through May 17, 2023 (Predecessor), a $361 million non-cash pre-tax impairment charge on the asset group’s undepreciated property, plant and equipment is presented as “Impairments” on the Consolidated Statements of Operations.