A natural gas-fired power plant in California filed for bankruptcy protection last week, blaming “inhospitable” regulations and a shift toward renewable energy for power generation.
La Paloma Generating, a 1,200-megawatt (MW) combined cycle plant about 110 miles northwest of Los Angeles, filed for Chapter 11 bankruptcy in Delaware, Kallanish Energy reports.
In its filing, La Paloma said market factors including slower-than-expected growth in electricity demand and an increase in renewable generation resources in California were “exacerbated by an inhospitable regulatory environment.”
The limited liability corporation states in its filing (reviewed by Kallanish Energy) states the company has 768 creditors, with assets between $100 and $500 million, while liabilities were pegged between $500 million and $1 billion.
La Paloma’s largest unsecured creditors include Bank of America, with two loans totaling $329.35 million, and SunTrust Bank, with a single loan to La Paloma totaling $110 million.
The facility is owned by Rockland Capital, one of several California plant owners that has asked the state for help in offsetting losses, arguing it’s in the state’s interest to support the natural gas plants because they provide stability and reliability to the power grid, Reuters reported.
An unexpected combination of oversupply of natural gas and a boom in solar and other renewable energy has depressed power prices and threatened the viability of natural gas plants that sell power into California’s electricity market.