Talen: Amazon's nuclear plant, a gas fleet, and the debt that bought it

Talen owns the Susquehanna nuclear plant in Pennsylvania and a fleet of gas plants bought across PJM, the US grid with the most datacentre demand. Its anchor customer is Amazon: up to 1,920 MW from Susquehanna through 2042, now supplied front-of-the-meter, with minimum commitments that management says reach 840 MW in 2029. In the quarter to September 2026 adjusted EBITDA was $669M, against $363M a year earlier, and adjusted free cash flow $433M. Its first 2027 guide is $2.50–2.85B of adjusted EBITDA and $1.50–1.75B of adjusted free cash flow, about a quarter higher, with about 70% of 2027 output hedged, and it has bought back about 19.5M shares since 2024. Conviction is LOW because the growth is bought with debt and sold forward. Net debt is about $9.2B, more than four times this year's guided EBITDA, against a 3.5x target management expects to reach in the second half of 2027; and a $1.5B accelerated buyback was funded by selling $1.5B of future PJM capacity payments at a $157M discount. PJM capacity prices sit inside a collar of about $175–325 a MW-day, extended to 2029/30, which caps the upside, and PJM's market review and Pennsylvania policy are open. It is the most leveraged of MenFem's power calls, beside Vistra and Constellation, and much of its growth is gas, the fuel MenFem found is actually being built when it resolved its nuclear call. BULLISH, conviction LOW, three years. This view was formed by MenFem's research process at Connor's request and adopted by him. The entry is the 6 November 2026 closing price; the market was closed when the call was published on 7 November.