Optim outlines contracts to go in Twin Oaks plant sale

Optim Energy LLC on July 11 filed with its bankruptcy court a list of agreements and permits that a potential purchaser of the coal-fired Twin Oaks power plant would be getting in an upcoming auction of that plant and its assets.

The U.S. Bankruptcy Court for the District of Delaware on July 3 approved the sale of the assets of Optim Energy Twin Oaks LP at an Aug. 4 auction in New York City.

Among the agreements to be assumed by any buyer are:

  • Texas-New Mexico Power, Interconnection Agreement, dated October 2002;
  • Headwaters Resources, Ash Marketing and Disposal Agreement dated April 2004;
  • Refined Coal Producers LLC, Refined Coal Sale Agreement dated August 2012;
  • Refined Coal Producers LLC, Coal Purchase Contract dated August 2012;
  • Refined Coal Producers LLC, Coal Yard Services Agreement dated August 2012;
  • Refined Coal Producers LLC, Coal Yard Site License;
  • Electric Reliability Council of Texas, Standard Form Market Participant Agreement dated January 2013;
  • ALSTOM Power, Thermal Services North America, Purchase Order for Evaporation Tubes.

The permits to be transferred include various authorizations issued by the Texas Commission on Environmental Quality for the plant itself and lignite handling equipment at the plant.

The new stalking horse bidder going into the Aug. 4 auction is Twin Oaks Power LLC, an affiliate of energy investor ArcLight Capital Partners LLC. Its offer price is $82m in cash. An Aug. 7 sale hearing date has been set where the judge will look at the auction results.

On Feb. 12, Optim Energy and its debtor affiliates commenced voluntary cases under Chapter 11. Optim identified the 305-MW Twin Oaks plant and its burdensome lignite coal supply contract as key reasons it had to seek bankruptcy protection.

Twin Oaks is a two-unit lignite-fired plant located in Robertson County, Texas. Twin Oaks sells its power into the market regulated by ERCOT. Twin Oaks purchases the vast majority of the coal necessary to operate the facility from Walnut Creek Mining under a long-term fuel supply agreement executed in 1987.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.