Bankruptcy to keep power plant running, owner says
The giant Homer City power plant continues to generate electricity as up to $750 million in new pollution control equipment is installed — and a bankruptcy filing on Tuesday by a related entity will keep that process going, the plant's primary owner said.
Homer City Funding LLC, the issuer of bonds for the coal fired plant operated by a unit of Edison International, filed for Chapter 11 bankruptcy protection from creditors in Delaware.
“This is all part of the plan to keep the plant running, and to continue construction of the scrubbers” on two of the facility's three generating units, said Andy Katell, spokesman for the subsidiary of General Electric Co. that is the plant's primary owner.
“It's a prepackaged bankruptcy, meaning it's voluntary, and it's a consensus among the parties involved.”
Business continues as usual at the 1,884-megawatt plant that employs 250 people. In addition, 460 workers are involved in the scrubber installations to lessen emissions and even more workers are completing planned routine maintenance, he said.
The pollution control work that began April 3 is more than 30 percent complete. It is scheduled to be finished in August 2014, though the company has said it may take longer.
By year's end, the investment in the scrubbers is expected to be about $400 million, Katell said,
The Homer City entity that was formed several years ago to issue debt securities listed assets and debt of $500 million to $1 billion each in the bankruptcy filing.
Edison in September agreed to transfer control of the power plant to the GE unit. That agreement is subject to consent by more than two-thirds of bondholders, according to a filing with the Securities and Exchange Commission.
Under the proposed restructuring plan, the reorganized company will be jointly owned by units of GE and by MetLife Inc.
Homer City Funding's debt includes $466 million in 8.734 percent notes that mature in 2026 and $174 million in 8.137 percent notes maturing in 2019, according to data compiled by Bloomberg News. The bondholder trustee is Bank of New York Mellon Corp., court papers showed.
Homer City Funding failed to make its Oct. 1 payment on existing bonds.
Holders of at least two-thirds of the outstanding principal of the existing bonds agreed to vote to accept the plan, Homer City Funding said. The company is asking the court to hold a Dec. 6 hearing for both approval of the disclosure statement and confirmation of the plan.
Kim Leonard is a staff writer for Trib Total Media. She can be reached at 412-380-5606 or firstname.lastname@example.org. Bloomberg News contributed to this report.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Penguins sign defensive prospect
- NHL notebook: St. Louis retires after 16-year career
- Kessel ‘excited’ to be a Penguin
- Wolf vetoes bill privatizing Pennsylvania’s liquor system
- Liriano, Pirates complete sweep of Tigers
- Wabash Tunnel to open to inbound, high-occupancy vehicles Saturday night
- Attorney General’s twin sister sued by FBI agent ex-boyfriend
- Hurricanes owner rips Rutherford, Penguins
- Youngest champion in tournament history to play for Mt. Lebo clay crown
- Murrysville native Bullock vying for health magazine’s ‘Next Fitness Star’
- Rossi: Wild Wednesday proves Steelers rule