Edison Mission Energy

Edison Mission Energy (EME) was a United States independent power producer headquartered in Irvine, California, and owned by Edison International. Established in 1986, the company operated outside the traditional regulated utility model by developing, owning, and managing generating facilities that sold electricity into wholesale power markets or under contractual arrangements. Its portfolio covered several forms of generation, including coal-fired, natural-gas-fired, oil-fired, waste-coal, and wind power facilities. The company became particularly notable for its wind portfolio. Before its restructuring, EME was described as one of the largest wind-power operators in the United States, while also maintaining a substantial conventional-generation fleet. The scale and diversity of its holdings reflected the business model of large independent power producers that expanded during the liberalization of U.S. electricity markets. At the same time, the portfolio exposed EME to changing power prices, fuel economics, environmental requirements, and the financial pressures associated with highly leveraged generation assets. On December 17, 2012, Edison Mission Energy sought protection under Chapter 11 of the U.S. Bankruptcy Code. The filing included a proposal to transfer control of the company to holders of approximately $3.7 billion in unsecured bonds. The restructuring plan was approved by the U.S. Bankruptcy Court in March 2014. Although the plan contemplated EME remaining a subsidiary of Edison International, a newly established trust controlled by former bondholders was to hold most of the company's former assets and liabilities. In 2014, NRG Energy acquired all of Edison Mission Energy's assets for $2.64 billion with approval from the bankruptcy court, following an agreement involving EME, Edison International, and certain EME creditors. At the time of the transaction, the portfolio included approximately 1,700 megawatts of wind capacity, 1,600 megawatts of gas-fired capacity, 4,300 megawatts of coal-fired capacity, and 400 megawatts of oil- and waste-coal-fired capacity. The sale effectively ended EME's role as an operating power-generation platform. The former company was subsequently dissolved, and Edison Mission Energy is now a historical rather than active brand.

Edison Mission Energy was created in 1986 as a subsidiary of Edison International to participate in independent power generation. Unlike a conventional regulated electric utility, an independent power producer develops or acquires generating assets and sells electricity through wholesale markets or power-purchase arrangements. EME's business therefore centered on the ownership and operation of generating facilities rather than retail electricity distribution. Over time, the company built a broad U.S. generation portfolio. Its assets included coal-fired plants, natural-gas-fired facilities, oil-fired and waste-coal units, and renewable projects. Wind became an especially important part of its profile: EME was regarded as one of the largest wind operators in the United States. The combination of renewable and conventional generation gave the company exposure to multiple electricity and fuel markets, but also created significant operational, regulatory, and financial complexity. The conventional power portfolio included substantial coal and gas capacity. These assets were affected by wholesale electricity prices, fuel costs, plant utilization, environmental regulation, and the competitive effects of newer generation technologies. The company's financial position also became increasingly difficult to sustain. On December 17, 2012, EME filed for Chapter 11 bankruptcy protection. Its proposed restructuring would have transferred control to holders of about $3.7 billion in unsecured bonds. The U.S. Bankruptcy Court approved the reorganization plan in March 2014. Under the approved structure, Edison Mission Energy would nominally remain a subsidiary of Edison International, while a new trust controlled by former bondholders would contain most of the former assets and liabilities. The restructuring was followed by a court-approved sale of the operating portfolio. In 2014, NRG Energy purchased all of Edison Mission Energy's assets for $2.64 billion under an agreement involving EME, Edison International, and certain creditors. At the time of the sale, EME's reported portfolio comprised approximately 1,700 megawatts of wind capacity, 1,600 megawatts of gas-fired capacity, 4,300 megawatts of coal-fired capacity, and 400 megawatts of oil- and waste-coal-fired capacity. The transaction transferred the substantive operating business to NRG Energy and marked the end of Edison Mission Energy as a major independent power-generation platform. The company was subsequently dissolved and is now principally relevant as a historical Edison International subsidiary and a case study in the restructuring of a highly leveraged U.S. power producer.

• 2014

  Reorganization plan approved

  [1]Edison Mission Energyen.wikipedia.org

  The U.S. Bankruptcy Court approved the company's reorganization plan in March 2014.

• 2014

  NRG Energy acquires the asset portfolio

  [1]Edison Mission Energyen.wikipedia.org

  NRG Energy acquired all of EME's assets for $2.64 billion after obtaining bankruptcy court approval.

• 2012

  Chapter 11 bankruptcy filing

  [1]Edison Mission Energyen.wikipedia.org

  The company filed for Chapter 11 protection and proposed a restructuring involving approximately $3.7 billion in unsecured bonds.

• 1986

  Edison Mission Energy is established

  [1]Edison Mission Energyen.wikipedia.org

  Edison Mission Energy was formed as a subsidiary of Edison International to pursue independent power-generation activities.

Independent power producer operating a diversified U.S. generation portfolio, with a notable presence in wind power.

• Renewable electricity

  Wind power generation

  Wind generation was a defining part of Edison Mission Energy's portfolio and helped make the company one of the larger wind operators in the United States. The business supplied electricity from utility-scale wind projects rather than selling consumer products directly to households.

• Thermal electricity

  Coal-fired power generation

  Coal-fired generating facilities formed the largest portion of the reported portfolio at the time of the 2014 asset sale, with approximately 4,300 megawatts of capacity. These plants supplied wholesale electricity and operated within the commercial and regulatory conditions of U.S. power markets.

• Thermal electricity

  Natural-gas-fired power generation

  EME operated natural-gas-fired generation assets with approximately 1,600 megawatts of reported capacity at the time of the NRG transaction. Gas generation provided dispatchable electricity and diversified the company beyond coal and renewable assets.

• Thermal electricity

  Oil- and waste-coal-fired power generation

  The company's remaining reported conventional portfolio included approximately 400 megawatts of oil-fired and waste-coal-fired capacity. These assets represented a smaller component of EME's generation mix and were transferred as part of the 2014 sale.

• 2014

  Sale of Edison Mission Energy assets to NRG EnergyM&A

  Background

  Following the bankruptcy reorganization, EME's generation portfolio was prepared for a court-approved sale.

  Action taken

  NRG Energy acquired all of Edison Mission Energy's assets for $2.64 billion.

  Aftermath

  The transaction ended EME's role as an operating independent power producer and transferred its portfolio to NRG Energy.

  Asset acquisition price. $2.64 billion (2014)

  Source

• 2012

  Chapter 11 restructuringStrategy

  Background

  Edison Mission Energy faced financial pressure across its leveraged independent-power-generation portfolio and sought court protection.

  Action taken

  The company filed for Chapter 11 bankruptcy and proposed transferring control to holders of approximately $3.7 billion in unsecured bonds.

  Aftermath

  The restructuring plan was approved in 2014 and led to the transfer of most operating assets to NRG Energy.

  Unsecured bonds involved in proposed restructuring. $3.7 billion (2012)

  Source

1. 1Edison Mission Energyen.wikipedia.org