A federal bankruptcy judge in New York gave final approval to Edison Mission Energy’s (EME’s) Chapter 11 reorganization plan on Mar. 11, one that involves the sale of all assets and subsidiaries to NRG Energy for $2.6 billion.
The deal—involving 42 plants and 8.9 GW of net generation nationwide—makes NRG the largest merchant plant owner in the U.S., with a total of more than 53 GW of generating capacity. It will also become the third-largest generator of renewable energy. Proceeds from the sale will go to pay EME’s creditors.
The deal was held up until EME’s former parent Edison International agreed last month to a $1 billion settlement that resolved EME’s tax, pension, and other liabilities. Edison will transfer about $625 million in cash and notes to EME’s creditors and assume about $350 million in debt. About $200 million of the sale proceeds will go to Edison, while EME’s debt will be retired.
EME filed for bankruptcy protection in December 2012, seeking to restructure itself as an entity independent from Edison. Its generating assets include fossil plants in California, Illinois, Pennsylvania, West Virginia, and Doga, Turkey; a biomass facility in New York; and 31 wind energy projects in 11 states, totaling about 1.8 GW.
EME was created by Edison as a holding company in 1986. Its largest subsidiary is Midwest Generation, which owns about half of its capacity, nearly all of it coal-fired. Midwest Generation’s plants are facing nearly $1 billion in emissions upgrades in the next few years, according to EME’s most recent quarterly report. NRG has not revealed its plans for these plants.
The deal is expected to close by the end of the first quarter, pending approval from the Federal Energy Regulatory Commission.
—Thomas W. Overton is a POWER associate editor (@thomas_overton, @POWERmagazine)