ExGen says low electricity prices have negative impact.
According to reports, ExGen Texas Power Holdings LLC and ExGen Texas Power LLC, a subsidiary of Exelon Corp., on November 7 filed for Chapter 11 bankruptcy. The filing in U.S. Bankruptcy Court in Delaware is aimed at reducing the company’s debt. If the action is approved by the court, four of EGTP’s five natural gas-fired power plants in Texas would be owned by lenders.
The company says that low natural gas prices, and low prices for electricity, had a negative impact on its fossil fuel-powered generation. In March of this year, Reuters reported that EGTP had about $650 million in debt.
In Texas, EGTP operates five natural gas-fired power plants, including two combined cycle plants, two gas-fired steam boilers, and a simple cycle plant.
Low prices for electricity over the past several months have resulted in plant closures and other financial restructuring. Power plant operators across the country are reportedly struggling, particularly in Texas.
According to SEC filings, Exelon said in a statement that “Historically low power prices within Texas have created challenging market conditions for all power generators, including the five natural gas-fired EGTP plants.”
High Risk Energy Investments
The White Law Group is investigating the liability that brokerage firms and financial advisors may have for recommending high risk energy investments, like ExGen Texas Power LLC, to their clients.
Brokerage firms that recommend energy investments are required to perform adequate due diligence on the investments. They must ensure a reasonable likelihood of success.
Brokerage firms must also evaluate whether the investments are suitable in light of their client’s age, net worth, investment experience, risk tolerance, and investment objectives. Firms that fail to perform adequate due diligence, or that make unsuitable recommendations, can be held responsible for losses in a FINRA arbitration claim.
If you suffered losses investing ExGen Texas Power LLC or another energy investment and would like to discuss your litigation options, please call The White Law Group at 888-637-5510 for a free consultation.
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