Sundevil asks for more time to complete sale of Gila River power units

Saying it needs a bit more time to close on the sale of its 1,100 MW of capacity in Arizona, Sundevil Power Holdings LLC on Oct. 7 asked its bankruptcy court for an extension on its deadline to file a reorganization plan and to win creditor acceptances of that plan.

On Feb. 11, Sundevil and related companies sought Chapter 11 protection at the U.S. Bankruptcy Court for the District of Delaware. These companies are merchant power generators through Sundevil’s ownership of two of the four 550-MW, natural gas-fired power blocks of the Gila River Power Station in Gila Bend, Arizona. Sundevil and the other power block owners sell energy into the Southwest electric power market, specifically the sub-region of Arizona, New Mexico, and Southern Nevada known as the Desert Southwest.

On May 4, the debtors advised the court and all parties in interest that they had accepted a bid of CLMG Corp., on behalf of itself and Beal Bank USA, for the purchase of substantially all of the assets. On Aug. 23, the court approved this sale.

The debtors have previously obtained two exclusivity extensions. The current exclusivity period to file a plan is Oct. 7, with a Dec. 16 deadline to line up creditor support for the plan.

Said the Oct. 7 extension request: “Save for a modest amount of further work on closing documentation and consents, the Debtors now expect that closing upon the Sale is imminent. The request for FERC approval with respect to the sale was submitted on or about August 11, 2016, and the parties believe that FERC approval is likely to occur in the very near future. The Debtors have prepared a chapter 11 plan that is now in the final stages of preparation for filing, together with a proposed disclosure statement. The Debtors expect to be in a position to file their proposed plan and disclosure statement in the very near future. Accordingly, the Debtors respectfully submit that a reasonable further extension of the Exclusive Periods is warranted.”

Sundevil wants to extend the plan flling deadline to Dec. 6, and the creditor solicitation period to Feb. 14, 2017. There is an Oct. 21 deadline for any objections to these extensions, with an Oct. 31 court hearing due.

Two affiliated companies that will own these two power blocks at Gila River, CXA Sundevil Power I Inc. and CXA Sundevil Power II Inc., on Oct. 7 filed with the Federal Energy Regulatory Commission notices of self-certification as exempt wholesale generators. CXA Sundevil Power I will control Power Block 1 and CXA Sundevil Power II will control Power Block 2.

The CXA Sundevil companies are wholly-owned, indirect subsidiary of Beal Bank USA (BBUSA). BBUSA has formed these companies to acquire and own these power blocks, together with the corresponding joint ownership interests, as a result of the bankruptcy of Sundevil and default on loans made to Sundevil by BBUSA. On Aug. 26, CXA I and CXA II each filed a petition at FERC for authority to sell energy, capacity, and ancillary services at market-based rates. Those applications are still pending.

A company contact is: James Erwin, CLMG Corp., 7195 Dallas Parkway Plano, TX 75024, (469) 467-5414, jerwin@clmgcorp.com.

This asset sale process does not involve the other two blocks at the Gila River plant. Tucson Electric Power and UNS Electric own 100% of Power Block 3. Gila River Power LLC, part of Entegra Power, owns 100% of Power Block 4.

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.