Luminant Energy Co. LLC, which like its parent Energy Future Holdings is in bankruptcy protection, on March 24 asked its court to let it reject a power purchase contract with Forest Creek Wind Farm LLC.
Robert Frenzel, Senior Vice President and Chief Financial Officer of Luminant Energy, noted that TXU Portfolio Management Co. LP entered into the contract with Airtricity Forest Creek Wind Farm LLC as of March 2006. Debtor Luminant is the successor in interest to TXU Portfolio Management and Forest Creek Wind Farm is the successor in interest to Airtricity Forest Creek Wind Farm.
Luminant was required to secure the contract with a $24 million parent guarantee from Texas Competitive Electric Holdings Co. LLC (TCEH), which expired on Dec. 31, 2014, as well as a $25 million letter of credit. “Luminant has determined that the contractual prices for wind power and RECs under the Contract are substantially above forecasted prices, potentially in excess of the letter of credit,” wrote Frenzel. “I believe that, if necessary, the Debtors can source wind power and related services on more economical terms. Furthermore, the Debtors have been negotiating with Forest Creek, but have been unable to reach a satisfactory agreement.”
Any objections to this rejection motion must be filed with the U.S. Bankruptcy Court for the District of Delaware by April 7, with an April 14 hearing to be held on the motion.