Its a nice hot week, and all three generating units at the Homer City coal-fired power plant are running around the clock. <\/p>\n
Thats as far into the future as William Wexler can see. <\/p>\n
Mr. Wexler, who is charged with restructuring the Indiana County plant to make it more attractive to a potential buyer, said the underlying conditions that forced the facility into bankruptcy in January havent changed. So the plant must. <\/p>\n
The situation here at the moment, while its not dire, it certainly needs to improve fairly quickly, Mr. Wexler said. <\/p>\n
When asked to clarify a timeline, he said, sooner than later. <\/p>\n
In April, Homer City emerged from its second bankruptcy in five years. Formerly owned by a joint-venture headed by GE Capital, the plant is now largely the property of bondholders who swapped some $606 million in debt for equity in the new company, Homer City Holdings LLC. Mr. Wexler is its board chairman. <\/p>\n
The current owners of Homer City are hedge funds and private equity firms, Mr. Wexler said, who arent interested in owning a coal plant for a long period of time. <\/p>\n
Ive spoken to all the employees, and I explained who we are and what were here to do, he said. That is: to get this plant to be a far more profitable member of the community and to sell it. <\/p>\n
Mr. Wexler was recruited for this effort fresh off another coal power plant restructuring in New York, where he oversaw two facilities that were sold last year. <\/p>\n
There isnt much he can do about revenue, he said. <\/p>\n
Thats a function of the market, which hasnt been kind to Homer City. Competition from cheap natural gas, falling demand and warmer winters has turned this once round-the-clock workhouse into a more sporadic resource. <\/p>\n
But we can do a lot to engage on the expense side, he said. Fuel, employees and maintenance all of those are currently being attacked. <\/p>\n
The 1,884-megawatt plant employs 240 workers. Its biggest expense is the coal it burns, so getting that more cheaply is a top priority. <\/p>\n
The facilitys previous efforts to wiggle out of more expensive coal contracts landed it in court with its largest supplier, Cecil-based Consol Energy Inc. The two parties reached a resolution that maintains Consol as a coal provider for about 30 percent of the plants needs. <\/p>\n
The facility is also in the process of selecting a company to operate the plant. It is currently run by NRG Energy, which is among the bidders being considered, Mr. Wexler said. <\/p>\n
As for a speedy sale, he said its not imminent. <\/p>\n
While some would-be suitors have expressed interest, Mr. Wexler said that people interested in energy assets right now are looking for bargain basement prices. Homer City commands more, Mr. Wexler believes. <\/p>\n
GE Capital tried to find a buyer for Homer City last year and received bids ranging in value between $230 million and $535 million, but debt holders rejected them. <\/p>\n
The companys advisers determined that the value maximizing path was to pursue a Chapter 11 restructuring, bankruptcy documents state. <\/p>\n
Anya Litvak: alitvak@post-gazette.com<\/a> or 412-263-1445. <\/p>\n <\/p>\n Originally posted here:<\/p>\n Homer City power plant, out of bankruptcy, still needs an overhaul - Pittsburgh Post-Gazette<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Its a nice hot week, and all three generating units at the Homer City coal-fired power plant are running around the clock. Thats as far into the future as William Wexler can see. Mr Continue reading