The Burgess Power Plant in Berlin, which has been at the center of a long debate over whether New Hampshire should subsidize plants that burn wood to produce power, has entered Chapter 11 bankruptcy because it says Eversource isn’t paying it for power. It says business operations and energy generation will continue during the “restructuring process,” which is bankruptcy-talk for shuffling your debts.
This is a long and convoluted story involving politics, logging industry economics, climate goals and North Country culture. I haven’t been covering it and so I’m not quite sure what the latest move means. For what it’s worth, here’s the gist of the press release:
Burgess BioPower, LLC and Berlin Station, LLC (together the “Company”) announced that the Company has terminated the Power Purchase Agreement (“PPA”) governing the sale of power to the Public Service Company of New Hampshire doing business as Eversource (“Eversource”) following Eversource’s failure to make required payments to the Company. The Company has commenced chapter 11 cases in the United States Bankruptcy Court for the District of Delaware with the support of its senior secured lenders (the “Senior Secured Lenders”)
The Company and the Senior Secured Lenders have entered into a comprehensive restructuring support agreement (the “RSA”) that provides for an agreed restructuring of the Company’s assets and liabilities that will result in a substantial deleveraging of the Company or the sale of the Company. In connection with the RSA, the Senior Secured Lenders have agreed to provide up to $18 million in new money under a super priority senior secured debtor-in-possession financing facility (“DIP Financing”). The DIP Financing together with the Company’s unrestricted cash will provide the Company with sufficient liquidity to operate its business as a going concern and pay its obligations in the ordinary course of business. The Company anticipates that its trade vendors will not be impacted by the chapter 11 cases, nor will employees at the facility.
In addition, the Company has retained Dean Vomero of Applied Business Strategy as its Chief Restructuring Officer and formed a special committee of independent directors to oversee the restructuring process and guide the Company’s future long-term operating strategy.
The Company intends to use the chapter 11 process to confirm a plan of reorganization that will best position the Company for long-term success within the shifting energy landscape while protecting employees, maintaining its excellent relationships with vendors and suppliers, and continuing its positive impact within the City of Berlin. The Company is among the largest, most efficient, and technologically advanced solid-fuel power plants in the country and is consistently ranked as best-in-class operationally by independent engineers.