The bankruptcy judge for Longview Power LLC, which controls a 700-MW coal plant in northern West Virginia, on Dec. 18 approved the company’s disclosure statement, which allows Longview to now solicit creditor support for a reorganization plan.
Under this plan, Longview and a related coal-producing company will get new financing and emerge from Chapter 11 intact. The company in August sought Chapter 11 protection at the U.S. Bankruptcy Court for the District of Delaware, saying the power plant has never operated properly since starting up in 2010 and that wholesale power prices in the region have in the meantime dropped, also hurting its finances. There are extensive legal proceedings ongoing with the plant contractors over the alleged operational issues with the plant since startup.
The judge has set a Jan. 27 deadline for the company to solicit creditor support for its plan and a Feb. 10 plan confirmation hearing.
The bankrupt companies (called the debtors) operate through two primary business units: the Longview Debtors, whose primary asset is a 700-MW (net) supercritical coal-fired facility located in Maidsville, W.Va., along the Monongahela River just north of Morgantown; and the Mepco Debtors, a vertically integrated coal miner and processor with facilities located in southwestern Pennsylvania and northern West Virginia.
The Mepco companies sell about about half of their coal production to the Longview plant and about half on the open market. One major feature of the power project was a commitment to clean up water from old abandoned coal mine works in the area, which would be good for local water quality and eliminate underground water pools that were a flooding danger to Mepco’s ongoing underground coal mining operations nearby.
Also on Dec. 18, the judge approved a request related to the water cleaning efforts. As part of the restructuring transactions, the debtors agreed to take actions to acquire direct control over the Dunkard Creek water treatment facility, which processes the polluted mine water and supplies the water necessary to operate the Longview power plant. The debtors would purchase from investor First Reserve its equity interests in these facilities. First Reserve was one of the companies that several years ago helped form the power plant, water treatment and mining operations.