ExGen Texas Power (EGTP) Holdings LLC and ExGen Texas Power LLC, a subsidiary of Exelon Corp., on November 7 filed for Chapter 11 chapter. The submitting in U.S. Bankruptcy Court in Delaware is geared toward lowering the corporate’s debt, and 4 of EGTP’s 5 pure gas-fired energy vegetation in Texas could be owned by lenders if the motion is accepted by the courtroom.
Exelon in March of this yr employed a debt restructuring adviser, PJT Partners, to assist consider choices for the ExGen models, saying low pure fuel costs, and low costs for electrical energy, had a unfavorable affect on its fossil fuel-powered technology. Reuters on the time reported that EGTP had about $650 million in debt.
EGTP operates 5 pure gas-fired energy vegetation in Texas: two mixed cycle vegetation, two gas-fired steam boilers, and a easy cycle plant.
Power plant operators throughout the nation have struggled with low costs for electrical energy over the previous a number of months, leading to plant closures and different monetary restructuring, with Texas significantly impacted. Vistra Energy in October stated it will shut two massive coal-fired energy vegetation within the state; Luminant simply days earlier stated it will retire its 1.9-GW Monticello Power Plant in Titus County, Texas.
The enlargement of renewable power has pushed down electrical energy costs in lots of areas. A current evaluation by the Energy Institute on the University of Texas at Austin confirmed wind energy technology capability already could have surpassed coal-fired technology capability within the state.
Exelon, which on November 7 filed a Form Eight-Ok with the U.S. Securities and Exchange Commission (SEC) relating to the state of affairs, stated in a press release that “Historically low energy costs inside Texas have created difficult market situations for all energy mills, together with the 5 pure gas-fired EGTP vegetation.”
The assertion continued: “EGTP’s Board of Directors decided, after evaluating a spread of alternatives, to maneuver ahead with a two-part plan. First, Exelon Generation has negotiated an settlement with EGTP’s lenders that, pending a aggressive bidding course of and receipt of all obligatory approvals, would enable Exelon Generation to proceed to personal and function the Handley Generating Station in alternate for a $60 million cost to the lenders. Second, the lenders have agreed to alternate the debt they at present maintain in EGTP’s different 4 vegetation for fairness within the vegetation, successfully taking possession of those amenities.”
The three-unit Handley plant is a 1,265-MW facility in Fort Worth (Figure 1). The vegetation being exchanged for fairness are Wolf Hollow Generating Station, a 704-MW mixed cycle plant in Granbury; Colorado Bend Generating Station, a 498-MW mixed cycle facility in Wharton (Figure 2); ExTex LaPorte Generating Station, a small peaker plant in LaPorte; and Mountain Creek Generating Station, an 825-MW plant in Dallas.
Exelon within the SEC submitting stated it estimates a pre-tax achieve of $125 million to $200 million within the fourth quarter from the sale of property of the facility unit.
Reuters reported that EGTP has a $675 million time period mortgage that comes due in 2021. Thomson Reuters LPC reported November 6 that the mortgage, which partly pays a dividend to Exelon, was buying and selling at 71 cents on the greenback. Moody’s Investors Service reported that EGTP has a $20 million revolving credit score line due in 2019; $four million of that mortgage was drawn in January.
Moody’s earlier this yr stated it didn’t consider the market worth of EGTP’s energy vegetation would cowl the…