Parent company of Joliet, Romeoville power plants files for bankruptcy
FROM STAFF AND WIRE REPORTS December 17, 2012 1:14PM
Steam rises from the Midwest Generation plants and the DesPlaines River in Joliet. | File photo
Updated: January 19, 2013 6:15AM
Power wholesaler Edison Mission Energy and its Chicago-based subsidiary Midwest Generation have filed for Chapter 11 bankruptcy protection to try to restructure $5 billion in debt.
In bankruptcy petitions filed Monday in Chicago, Edison Mission Energy listed $5.13 billion in assets and $5.1 billion in debt. California-based Edison Mission is owned by California utility Edison International.
Midwest Generation has plants in Joliet and Romeoville, as well as in Waukegan and Pekin. The company closed its two Chicago coal-fired plants — Fisk and Crawford stations — in August. The company has acknowledged the possibility of bankruptcy for months.
Officials said California-based Edison Mission Energy has been challenged by depressed energy prices and high fuel costs affecting its coal-fired plants, combined with pending debt maturities and the need to retrofit its coal-fired facilities to comply with environmental regulations.
The company today had faced the expiration of a 30-day grace period for an interest payment of nearly $100 million it owned on unsecured bonds. It did not make the payment. The company had earlier said that failure to make the payment would likely trigger a Chapter 11 filing.
The company, a subsidiary of Edison International, lists among its 30 largest creditors Commonwealth Edison Co., owed $19.2 million, and Peoples Gas, owed more than $243,000.
Edison Mission President Pedro Pizarro says the companies hope to emerge from bankruptcy as a separate company independent of Edison International by December 2014.
It wasn’t immediately clear how the filing would affect Midwest Generation’s Illinois operations.
But Pizarro said, “Throughout this process, business operations will continue in the normal course, and we will continue to support our customers, suppliers and employees.”
The company employs 1,300 people nationwide, including 845 in Illinois.
In the statement announcing the bankruptcy, the company said it has cut its workforce and taken other measures, including closing “uneconomic power plants,” to meet its financial challenges.
Coal-fired plant closures are expected to quadruple in the next five years, according to the U.S. Energy Information Agency.
Coal-fired power plants have been struggling due to the low cost of natural gas. Discoveries of shale gas have helped dramatically decrease energy prices, and technological advances have made it easier to get natural gas out of the ground. Meanwhile, burning natural gas creates fewer emissions, so that makes natural gas plants a cheaper, cleaner option.