Citing historically low electricity prices and a challenging business environment for power generators, Chicago-based Exelon Corp. filed Chapter 11 bankruptcy protections for Exelon Generation Texas Power LLC (“EGTP”) — a merchant generation unit Exelon owns in Texas. The unit will continue to own and operate the 1,265 MW Handley Generating Station in Fort Worth, Texas, in exchange for a $60 million payment to the lenders.
“Exelon Generation remains committed to working with all stakeholders to ensure the best outcome for our employees, customers, communities and shareholders,” according to Exelon.
A combination of forces, including flat demand, cheap natural gas and low renewable energy prices, are putting pressure on merchant generators, making it hard for them to recoup their costs. EGTP’s bankruptcy comes as Vistra Energy recently announced plans to close three coal-fired power plants in Texas — part of 5,625 MW of fossil fuel capacity that is slated to be retired or mothballed in Texas over the next year.