The Federal Energy Regulatory Commission on July 1 approved the power plant aspects of a bankruptcy reorganization plan for Verso Corp., a maker of coated papers that owns several power/cogen plants that supply its facilities around the country.
On June 2, Verso Corp., Verso Maine Energy LLC, Rumford Paper Co. and NewPage Energy Services LLC filed this application related to a reorganization plan that is pending at the U.S. Bankruptcy Court for the District of Delaware. Under the plan, the indirect ownership of all the voting interests in Verso Maine, Rumford and NewPage Energy will be transferred to a new set of stockholders. The existing equity of Verso will be cancelled and all existing equity owners of Verso will lose their current ownership interests in Verso. The plan provides for new common stock of Verso to be issued to certain existing creditors of Verso’s subsidiaries (called the “New Stockholders”).
Verso and its subsidiaries own eight paper mills located in Kentucky, Maine, Maryland, Michigan, Minnesota and Wisconsin. Before the bankruptcy reorganization plan is implemented, investment funds managed by Apollo Management VI LP beneficially indirectly own approximately 44%, and Verso management and the public own a total of approximately 56%, of the outstanding shares of Verso’s common stock.
- Verso Maine is an indirect wholly owned subsidiary of Verso. It is a power marketer that performs certain electric energy management services for the Verso-owned paper mill in Jay, Maine (Adroscoggin Mill), including purchasing capacity and associated electric energy for the mill. Verso Maine also sells electric energy at retail to the Adroscoggin Mill, and uses its market-based rate authority to hedge purchases from the ISO New England (ISO-NE) market to make such retail sales, but it has not made any wholesale sales of electricity pursuant to this authority. Verso Maine also provides approximately 67 MW of demand response in the ISO-NE market.
- Rumford completed the sale of its paper mill and cogeneration facilities located in Rumford, Maine, to Catalyst Paper Holdings Inc. in 2015. Rumford is authorized to make wholesale sales of electric energy, capacity and certain ancillary services at market-based rates. Rumford does not own, or control through long-term contract, any generation, transmission or distribution assets.
- NewPage is a power marketer that is authorized to make wholesale sales of electric energy, capacity, and certain ancillary services at market-based rates. NewPage Energy does not own, or control through long-term contract, any generation, transmission or distribution assets.
Indirectly, Verso wholly owns six qualifying facilities (QFs) totaling 220.07 MW located in the ISO-NE market, three QFs totaling 178.4 MW located in the Midcontinent Independent System Operator (MISO) market, and one QF totaling 65 MW located in the PJM Interconnection market.
Verso also owns Consolidated Water Power Co., which owns five hydroelectric projects with a combined capacity of approximately 31.5 MW, each of which is a QF. These hydro facilities are all located in Wisconsin within the MISO market. Consolidated Water Power is authorized to make wholesale sales of electric energy, capacity and certain ancillary services at market-based rates. Consolidated Water Power also is regulated as a utility by the Public Service Commission of Wisconsin by virtue of providing retail electric service to the paper mills operated by its parent, NewPage Wisconsin System Inc. Most of the output of Consolidated Water Power’s hydroelectric projects is sold at retail to various paper mills.
NewPage Wisconsin is an indirect wholly owned subsidiary of Verso and the parent of Consolidated Water Power. It owns three cogeneration QFs with a combined capacity of 111.3 MW. The facilities are located at paper mills in Wisconsin and Minnesota within the MISO market. All of the output from these facilities is consumed by NewPage Wisconsin’s paper mills.