NRG Won't Acquire Liberty Power Connecticut Customers, Customers Will Be Dropped To Default Service

Liberty Power Holdings, LLC and related affiliates (Liberty, or Debtors) asked a bankruptcy court to approve an amended customer book purchase agreement with NRG under which NRG agrees that it will no longer acquire any Connecticut customers from Liberty as originally contemplated

Liberty said that Connecticut PURA approval is not likely to be received in the near future for the assignment of the applicable contracts.

PURA Staff has argued that PURA first must dispose of an investigation into alleged sales and marketing behavior by Liberty and its agents prior to addressing the application for the assignment of contracts, as Staff alleges that it may be found that the contracts are not valid and thus cannot be assigned.

Liberty said that as a result of the amended agreement with NRG, Liberty will instead transfer the Connecticut customers to default service. Liberty noted that this will obviate the need to procure supply for these customers for the upcoming winter

"[T]he Debtors believe that many of their customers under the Connecticut Customer Contracts will experience a rate reduction as a result of being returned to the local utility company, and therefore will not be damaged by the proposed rejection hereunder," Liberty said

Liberty will forego the amount of the purchase price related to the Connecticut contracts. A stalking horse agreement provided that, for East Residential Contract, the purchase price was estimated as $290 per RCE (subject to reconciliation, etc.). For East Commercial Contracts the purchase price was $165 per RCE

The Debtors said that they have conferred with their senior secured lender, Boston Energy Trading and Marketing, LLC (BETM) concerning the Connecticut amendment and BETM has no objection.

Separately, Liberty also sought to drop its remaining residential and non-residential accounts in the East, which are those not included in the NRG book purchase, to default service, after a supplemental sale process did not identify a cost effective sale transaction

"Despite the Debtors’ marketing efforts, the Debtors have not been able to generate a cost effective transaction for the sale and assignment of the Selected Customer Accounts," Liberty said

The remaining accounts to be dropped to default service include:

(i) a total of 687 residential accounts, across the following states: Illinois (211), Massachusetts (155), Ohio (129), Rhode Island (47), New York (41), Maryland (38), Pennsylvania (37), New Jersey (23), Delaware (5), and Washington D.C. (1) (collectively, the “Residential Accounts”)

(ii) a total of 1,624 non-residential accounts, across the following states: Illinois (350), New York (340), Pennsylvania (278), Massachusetts (178), New Jersey (117), Maine (101), Maryland (80), Ohio (80), Rhode Island (57), Washington D.C. (28), and Delaware (15)

Liberty said that the Debtors have conferred with their senior secured lender, Boston Energy Trading and Marketing, LLC (BETM) concerning the relief requested concerning these accounts and BETM has no objection.

The latest (and remaining) accounts to be dropped to default service follow an earlier motion to drop a subset of customers to default service (story here)