Oppenheimer lowered the firm’s price target on Talen Energy (TLN) to $180 from $210 and keeps an Outperform rating on the shares. The firm says that in a disappointing development, FERC rejected Talen/PJM’s amended ISA. Oppenheimer notes this ruling only impacts power supplied beyond the initial 300MW, which is not slated to be needed until 2027. The firm believes Talen has several paths forward, including file for re-hearing within 30 days, and then filing with the circuit court if rejected, and/or restructure the deal with AWS, and either stay behind-the-meter, but share the costs with AWS for grid backup, or more likely go in front-of-the-meter, sign a virtual PPA with AWS and share the costs.
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