A pair of natural-gas-fired power plants owned by Talen Energy Corp. are going into chapter 11 protection for the third time since 2014, and the plan is to hand ownership to senior creditors owed nearly $555 million, WSJ Pro Bankruptcy reported. Talen’s Northeast Gas Generation LLC, which owns a 1,080-megawatt facility in Athens, N.Y., and a 360-megawatt plant in Charlton, Mass., is seeking a debt restructuring in the U.S. Bankruptcy Court in Wilmington, Del. The facilities have passed through bankruptcy twice since 2014. In the last bankruptcy, their owner — then known as New MACH Gen LLC — sold a third plant in Arizona to a lender in 2018 while retaining ownership of the Athens and Charlton facilities. Talen acquired MACH Gen in 2015 for $1.175 billion, one year after MACH Gen emerged from its first chapter 11 case. Talen executive Dale Lebsack said yesterday that the facilities had been subject to “extraordinary fluctuations” in their regional power markets, driven by low natural-gas prices that have depressed energy pricing. At the same time, he said, supply is increasing relative to demand, which has further eroded during the coronavirus pandemic and the ensuing economic recession as industrial and commercial consumers use less electricity. First-lien lenders are supplying a $40 million loan package to finance the bankruptcy. The company expects to propose a restructuring transaction that would “transfer, sell or otherwise convey” the plants to those lenders, Lebsack said.
