The bankruptcy court for Optim Energy LLC on July 3 ordered an August 4 auction date for the assets associated with the coal-fired Twin Oaks power plant in Texas, with a new party approved at the last-minute as the “stalking horse” bidder for these assets.
The new stalking horse is Twin Oaks Power LLC, an affiliate of energy investor ArcLight Capital Partners LLC. Its offer price is $82 million in cash. An August 7 sale hearing date has been set where the judge will look at the auction results, according to GenerationHub.
On February 12, Optim Energy and its debtor affiliates commenced voluntary cases under Chapter 11 at the U.S. Bankruptcy Court for the District of Delaware. Optim identified the 305 MW Twin Oaks plant and its burdensome lignite coal supply contract as key reasons it had to seek bankruptcy protection.
The original bid, for $60 million in cash, was filed with the court on June 13 and was with Major Oak Power LLC, an affiliate of The Blackstone Group LP.
Twin Oaks is a two-unit lignite-fired plant located in Robertson County, Texas. Twin Oaks sells its generated power into the market regulated by the Electric Reliability Council of Texas (ERCOT). Twin Oaks purchases the vast majority of the coal necessary to operate the facility from Walnut Creek Mining under an executory long-term fuel supply agreement (FSA) executed in 1987.