Bucksport Generation LLC, which controls a 303-MW power plant in Maine, on Nov. 3 filed for Chapter 11 protection at the U.S. Bankruptcy Court for the District of Maine.
Kyle Nenninger of Energy Advisory Partners LLC, working as a consultant for the company, provided an explanation to the court of the circumstances around this bankruptcy filing. Bucksport Generation owns the power plant, and sister company Bucksport Mill LLC owns the nearby paper mill that had been taking electricity from the power plant. Both companies are controlled by AIM Development (USA) LLC. Operation of the power plant was contracted out earlier this year to Consolidated Asset Management Services (Maine) LLC, though that company is now being eliminated from the management role to save money.
Both facilities were formerly owned by Verso Paper. The combined-cycle power plant, featuring a General Electric gas turbine, is mostly fueled with natural gas, with oil also used. Nenninger said the power plant supplied electricity to both the paper mill and the ISO New England market. It also supplied steam to the paper mill.
Nenninger said the paper mill has been shut down and is to be demolished, leaving the power plant solely to sell electricity on the open market. He said the power plant is currently in a stand-by capacity mode, supplying power only when ISO New England needs it. The power plant operates rarely at this point, he said.
Nenninger said a key thing that pushed the company into bankruptcy is a long-term maintenance agreement with General Electric International, which is too costly given the current economic situation. GE International is making claims against the power plant operator of several million dollars related to alleged defaults under that agreement. And the plant operator is making its own claims against GE International.
Bucksport Generation also has issues with Bangor Gas because the plant is no longer taking its minimum gas requirements under a long-term gas supply contract. The bankrupt company said it has failed to win concessions from Bangor Gas.