Public opinion on the April determination has been mostly even. Board officials say they received 4,221 comments favoring extension and 4,326 comments against. This allows Midwest, which filed for Chapter 11 in Northern Illinois U.S. District Court in Q4 2012, time to decide on a long-term solution while maintaining operations.
“The key to the variance would enable us to defer $200 million of capital expense critical for cash conservation as we undergo financial restructuring,” said Midwest CEO Doug McFarlan. “It does give us the best-possible opportunity to develop a viable coal fleet” including “unit-by-unit decisions on retrofit versus retirement.”
Officials at Midwest, a merchant power generator that sells electricity wholesale, said cash flow losses stemmed from “unexpected and declining energy prices.” The company had income of $85 million between Q1 and Q3 2011, but suffered a $63 million net loss year-on-year in 2012 “exacerbated” by 60% cost increases for low-sulfur coal.
Company officials have added remaining coal plants—Powerton, in addition Waukegan, Joliet and Will County—could easily wind up under new ownership before bankruptcy is completed. Combined, they generate 4,300 mw of electricity. Midwest, in addition, has signed deals purchasing 11.8 million tons of PRB coal for the plants this year.
Midwest also purchased six coal plants from Commonwealth Edison, also headquartered in Chicago, for $4.9 billion in late 1999.