AES Eastern Energy's $2.25 million sale of non-operating plants OK'd

By Jim Witters

Wilmington, Del., Oct. 10 - AES Eastern Energy, LP received approval for the $2.25 million sale of its remaining business assets, including four non-operating coal-fired power plants, during a hearing in the U.S. Bankruptcy Court for the District of Delaware.

GMMM Holdings Corp. agreed to fully assume the costs of asset retirement and environmental closure, AES attorney Adam P. Strochak told the court.

The debtors were concerned that they would have to pay someone to take the properties, because none of the plants could be revived at a reasonable cost and because each carried significant environment remediation costs, Strochak said.

AES said that there are nearly $3 million in annual carrying costs associated with the non-operating facilities, which include real property taxes, insurance premiums, environmental compliance expenses and other costs.

The GMMM offer was so good, he said, that the debtors decided to forgo an auction and handle the transaction as a private sale.

GMMM's backers are experienced in environmental remediation and redevelopment, Strochak said.

The buyer plans to permanently retire the non-operating facilities, salvage or scrap the related equipment and demolish the buildings so the sites eventually can be redeveloped.

AES Eastern Energy, which operates more than 1,000 megawatts of capacity at four facilities in New York, filed for bankruptcy on Jan. 3, 2011. Its Chapter 11 case number is 11-14138.

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