Edison Mission bankruptcy filing excludes wind farms
Edison Mission Energy filed for Chapter 11 bankruptcy, but excluded its large portfolio of wind farms in which it has full or partial ownership from that legal process, a company spokesman tells Recharge.
Edison Mission is among the larger US wind developers and operators with projects in 10 states. It is sole owner of 1.486GW installed capacity, according to spokesman Charles Parnell. No projects remain under construction with the final two totalling 122MW in Nebraska coming into commercial operation the second half of this year.
Parent company Edison International hopes to win approval from the US Bankruptcy Court for the Northern District of Illinois for its proposal to spin off most parts of Edison Mission to creditors holding $3.7bn in unsecured bonds in fourth quarter 2014. He could not confirm news reports that the company has $1.2bn in additional debt.
Edison Mission’s main business is competitive power generation and most assets included in the bankruptcy filing are fossil fuel plants. Also excluded was its energy marketing and trading unit.
Parnell says that the wind farms are stand-alone business entities, have long-term power purchase agreements and cover their costs. Employees that operate and service them will remain with the company.
Edison International, which also owns regulated electric utility Southern California Edison (SCE), says it will take a $1.5bn charge this quarter tied to Edison Mission’s bankruptcy, the proposed spin-off, recognition of previously deferred losses and other charges.
The company also expects to account for Edison Mission as a discontinued operation in its 2012 financial statements, according to a filing with the Securities and Exchange Commission.
The parent company had indicated earlier this year that its wholly-owned subsidiary would file for bankruptcy given ongoing liquidity problems that led to a missed interest payment on bonds last month.
Edison Mission in court papers filed in bankruptcy court said its financial problems have resulted from lower power prices, high fuel costs, sluggish electricity demand and its growing debt load.
Suzlon, which launched legal proceedings in September against Edison Mission Group, whose units include Edison Mission Energy, had no immediate comment on the bankruptcy filing.
The Indian company claims that Big Sky, another subsidiary of Edison Mission Group, improperly declined to make a pre-payment for 114 2.1MW turbines delivered to a 240MW Illinois wind farm of the same name. Suzlon provided a 5-year, $206m loan to finance the turbines. According to Suzlon’s complaint, Big Sky claims some turbine components have defects which relieved it of its payment obligation.