Talen Energy beats third-quarter core profit estimates on higher rates

Nov 14 (Reuters) - U.S. utility firm Talen Energy (TLN) beat Wall Street estimates for third-quarter core profit on Thursday, helped by higher electricity rates and resilient demand for power.

Shares of the utility were up nearly 7% in premarket trading.

Power consumption is expected to reach record highs in 2024 and 2025 due to surging demand from artificial intelligence and data centers.

This demand growth will benefit utilities such as Talen Energy (TLN), whose shares have risen more than twofold in 2024.

Earlier this year, the company sold Amazon (AMZN) a data center that is connected directly to a nuclear power plant in Pennsylvania. Talen had hoped to boost the data center's capacity.

However, the Federal Energy Regulatory Commission (FERC) rejected the request this month over concerns that expanding the data center's capacity could raise power bills for the public and affect the grid's reliability.

Talen CEO Mac McFarland said the FERC's recent rejection was disappointing but added that the company would move forward with Amazon Web Services (AWS) to provide commercial solutions.

The company said it was evaluating options to provide the most efficient path to develop the AWS data center campus.

This includes the potential submission of a revised form of an amended interconnection service agreement or alternate contract structures with AWS.

Talen posted adjusted earnings before interest, taxes, depreciation and amortization of $230 million for the three months ended Sept. 30, compared with analysts' average estimate of $212.9 million, according to data compiled by LSEG. (Reporting by Vallari Srivastava in Bengaluru; Editing by Shreya Biswas)