v3.26.3
Revenue
 9 Months Ended
Sep. 30, 2026
Revenue from Contract with Customer [Abstract]  
Revenue
3. Revenue
The components of operating revenues for the periods were:
 Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Electricity sales and ancillary services, ISO/RTO$1,284 $496 $3,246 $1,385 
Capacity revenues323 166 767 303 
Physical electricity sales, bilateral contracts, other56 35 112 72 
Total revenue from contracts with customers1,663 697 4,125 1,760 
Realized and unrealized gain (loss) on derivative instruments(336)115 (922)65 
Other revenue— — — 7 
Operating revenues$1,327 $812 $3,203 $1,832 
Accounts Receivable
“Accounts receivable” presented on the Consolidated Balance Sheets were:
September 30,
2026		December 31,
2025
Customer accounts receivable$258 $160 
Other accounts receivable46 36 
Accounts receivable$304 $196 
During the nine months ended September 30, 2026 and 2025, there were no significant changes in accounts receivable other than normal receivable recognition and collection transactions. See Note 2 for additional information on Talen’s credit risk on the carrying value of its receivables.
Future Performance Obligations
Talen’s estimated future fixed fee performance obligations primarily include capacity volumes awarded, net of capacity repurchases by the Company, through PJM BRAs and incremental PJM capacity auctions, and components of capacity contracts with customers for which consideration is fixed and determinable. See Note 9 for additional information on the PJM BRAs.
Future performance obligations that were unsatisfied or partially unsatisfied were:
2026 (a)
2027202820292030
Thereafter (b)
Total
Expected capacity revenues (c)
$319 $1,270 $1,248 $529 $36 $109 $3,511 
__________________
(a)Estimated for the period from October 1, 2026 through December 31, 2026.
(b)Contractual maturities through 2035.
(c)Includes capacity revenues from volumes awarded in PJM BRAs through May 2029.
PJM Capacity Monetization
On October 1, 2026, TEM closed on a capacity monetization agreement with an unaffiliated third party, transferring its rights of future cash flows related to an aggregate $1.5 billion of certain future capacity revenues awarded by PJM and cleared by TEM in PJM BRAs. Such revenues are associated with cleared volumes of approximately 6.5 GW and 6.0 GW for the 2027/2028 and 2028/2029 PJM Capacity Years, respectively. In exchange, TEM was advanced $1.5 billion of proceeds which were reduced by a $157 million discount. The proceeds advanced to TEM will be repaid by PJM to the third party from monthly settlements of PJM capacity revenues beginning in June 2027 until the expiration of the arrangement in May 2029. The Company used the $1.3 billion of net proceeds from this arrangement to fund accelerated share repurchases. See Note 15 for additional information on accelerated share repurchases.
Talen remains responsible for operating its generation facilities, retains the obligation to perform as a PJM generation capacity resource with respect to the capacity sold in the transaction, has retained its rights for any earned capacity performance bonus payments, and has retained the risks associated with performance deficiency penalties.
As Talen continues to have future capacity performance obligations to PJM, amounts advanced to Talen under the arrangement will be presented as a liability on the Consolidated Balance Sheets. Capacity revenues are expected to be recognized over a period of time consistent with the fulfillment of the Company’s obligations to PJM. The $157 million discount is an implied finance charge, subject to amortization through expiry of the arrangement, and will be presented as “Interest expense and other finance charges” on the Consolidated Statements of Operations.
The future expected capacity monetization repayments are:
20262027202820292030Total
Expected amortization of deferred capacity obligation$— $432 $757 $311 $— $1,500