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Bill Gates' Energy Co. Files For Bankruptcy
Submitted by Charles Kennedy via OilPrice.com,
Bill Gates’ Texas energy company has filed for bankruptcy protection as the depressed power market results in untenable financial losses.
The company, Optim Energy (EnergyCo LLC), owned by a Gates investment fund, filed Chapter 11 Bankruptcy papers on Wednesday for its three power plants in eastern Texas, citing their inability to counter growing losses in the current market.
"The current depressed economic environment of the electric power industry – particularly with respect to coal-fired plants – and the debtors' liquidity constraints have resulted in continuing losses that, simply put, have left the debtors without alternatives," media quoted Optim CEO Nick Rahn as saying in court documents.
According to the documents, Optim has $713 million outstanding under a credit agreement with Wells Fargo, while its total estimated assets are worth less than $500 million. For 2013, Optim recorded revenues of $236 million.
According to the Wall Street Journal, Optim said its executives had failed to obtain consent to borrow more money under a credit facility.
Optim is reportedly planning to sell its coal-fired Twin Oaks plant during the bankruptcy, while the other two plants natural-gas fired.
Optim was founded in 2007, and electricity prices began to fall shortly afterwards, hindering the company’s ability to repay borrowed money.
Reductions in natural gas prices have hit power companies hard over the past several years, and Optim is the third to file for bankruptcy recently, following Dynegy Inc and Edison Mission Energy.
Optim notes in its court filings that the price of electricity in the company’s market area has fallen roughly 40% in the past five years, from around $63.24 per megawatt hour in 2008 to around $38 per megawatt hour by December 2013.
Optim’s owner, ECJV Holdings LLC, is owned by Cascade Investment LLC, an investment vehicle for Gates, the Microsoft Corp. co-founder and the world’s richest person, according to Bloomberg.
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Too bad Bill Gates isn't filing for bankruptcy...
so much for peak oil lulz...
Don't Cascades usually flow downwards?
The guy is a freak.
Energy winter cometh. Tottering house of cards.
ori
WAT??? Electric rates have never decreased in my entire life.
Watthour you saying????!?!?!?!???
vaccinate his azz and put him on GMO ...that'll finish that putz off
"Reductions in natural gas prices have hit power companies hard over the past several years"
What am I missing here...?
Falling jet-fuel prices are causing airlines to cancel flights and layoff workers...<sarc>
Only the spot price has hit rediculous levels. FWDs are saying NG not going to go very high. These d-bags probably locked in massive long-term contracts in the summer of '08.
If you are burning coal, low NG prices allowing your competitors to squeeze your margins certainly does...
Wind, which is intermittent,is the problem here being allowed special preferential access to the grid. The gas plants need to be kept 'hot' and burn fuel inefficiently (and increase costs) so they can ramp up and generate electricity (within 15 minutes) when wind goes offline (same with solar). They cannot be cold started in that 15 minute window. Same goes for coal/oil/biomass.
You nailed it Lumberjack - 100+. except for biomass. A properly designed biomass-to-biogas generating plant will never go offline. However, it will also never be profitable - unless the designers are able to understand that generating power is only one leg of the revenue stool for AD. And unless they are using something as biomass that is FAR higher yield than what the industry currently uses.
That flies in the face of every thing I have heard about NG fired plants, but I may be short on some details...
Sounds like your beef with wind and solar. I'll give you a hint, either we figure out how to make wind and solar work or it is game over...And even if we do get them to work, it may still be game over...
The push for more wind requires about an equal amount of firm up/back up power.
'losses in the current market' Shocking. Rofl...
Cntl alt del
"WAT??? Electric rates have never decreased in my entire life."
If that's the case, then you live in a state with a soviet-style monopoly utility regime. This is a topic with which Okie has more than a little experience. When natgas prices collapsed in 2008, states with competitive ('deregulated') electricity markets saw prices fall hard. This is one of the reasons TX is doing well, because so much of the state's power is natgas fueled and the electricity market is fiercely competitive. But it isn't just TX. We've helped industrials negotiate power deals across the U.S., and have seen substantial savings for our clients in IL, OH (big savings in OH), MA, MD, NJ, NY, PA. But we may be turning a corner. Natgas storage numbers are extremely low and there is much upward pressure on prices. I've said before, will say again, low natgas prices have been one of the few non-FRB sources of strength for the U.S. economy. I don't think most people appreciate the impact except in their personal fuel bills, but industrials, petrochemicals, commercial real estate, and utilities are major natgas buyers, and those costs flow through every bit of the economy. If we see one more cold snap in March and natgas futures hold over $5/Dth, the Fed will get it's inflation.
Deregulated??? Fuck, service areas are set "in law" by the state legislature, and that's not even getting into the PSC.
Won't anyone think of the poor bureaucrats?
There's a difference between the wires side and supply side of the electricity markets. The name on the top of your bill isn't your electricty supplier all the time.
That's why I put the word ('dergulated') in quotations in my post. That said, I really don't want multiple sets of competing power lines criscrossing the landscape. There is something to be said for the concept of "natural monopolies." Vertically integrated electric utilities is arguably a case in point, but since the Okie makes a good living helping negotiate power deals in competitive areas, he won't argue the point, much.
Everyone should think about this when they see the common man filing for bankruptcy - people like Gates the WORLD'S RICHEST MAN who also avoids taxes by hiding his wealth in the Gates Foundation could easily afford to pay these bills but files bankruptcy.
Maroon ... oil has nothing to do with electric power generation, other than in mining and transport of coal and to some degree, natgas. In that regard, it raises the costs of coal. The wholesale electricity market's been nuked by the hype of shale gas, which slashed those prices, making coal plants untenable - for now. Since natgas has already more than doubled from recent artificial lows, and shale gas depletion rates are over 60% falloff year one, 30% year two and 10% thereafter, coal plants will become viable again. Right after Uncle Warren repo's these.
Bill's friend Warren is also in a good position to end up with a piece of the soon-bankrupt "Energy Futures Hodling Company" which was at the time the largest leveraged buyout in history in teh $50B range. EFH (also known as TXU) will file and Buffet is a creditor. He also owns generation via MidAmerican Energy.
Here is how they arrive at the recovery...
https://www.youtube.com/watch?v=DW0VxxoCrNo
They are coal plants, Obama promised to bankrupt the coal industry, what's the surprise.
What's the surprise? How about that he's keeping his promise.
Well played, sir!
The surprise will be when he reverses that statement due to massive capacity shortfalls with generators shutting down their coal fired plants. PJM found out first hand last month what relying on NG generation can do.
Dominion is out of the retail energy business, Exelon announced that expected earnings this year to be way down.
"The current depressed economic environment of the electric power industry – particularly with respect to coal-fired plants – and the debtors' liquidity constraints have resulted in continuing losses that, simply put, have left the debtors without alternatives,"
he should have bought a railroad instead like Uncle Warren
Scumbag Warren just bought into the pipeline business (I call him a scumbag not for this pipeline purchase but his other CRONY CRAP!)
snip...
Other oil dealsIt also will be expanding its stake in ExxonMobil, the world's biggest oil company, by $3.5 billion.
Buffett put money into the Alberta oilsands earlier this year, investing $500 million in a stake in Calgary’s Suncor Energy Inc.
He has expressed a lot of faith in energy stocks, paying $5.6 billion to buy utility NV Energy within the past year and investing in exploration company National Oilwell Varco,
He also has publicly endorsed the Keystone XL pipeline, which would carry oil from Alberta to refineries in the southern U.S.
Did he invest in Weight Watchers and Crumbs bake shop too ? Weight Watchers "shedding some serious weight" today and Crumbs bake shop has been "crumbling like cookies" lately. Maybe the debt burdens are too high ?
You ought to write for bloomberg.
Maybe compounding interest during economic contraction is bad.
double-post
It should be illegal to wear bangs past the age of 50. I mean really! Why not just wear denim pants paired with a denim shirt and denim jacket! Top it off with some knd of denim hat whay don't cha?
Thas what they call a Canadian Tuxedo. ;)
Forward!
If Gates owns it, he should personally cover the debts.
Unless he wants to shaft his Wells Fargo bro.
Hey Gates
We here you use vaccines to murder.Is this true?
Can't they upgrade their coal plants to Vista? BTW 95% of all ATMs run on XP.
I know of Pentium II, Win98 PCs running critical systems in our local power plant
Step right up, step right up, get your coal fired power plant. Do I hear a bid of $1? $1? $1? Anyone?
CTL+ALT+DEL
Gates skates and Warren's Fargo either takes a write-off or dumps the defaulted debt onto the FED at face value.
These fuckers are employing the same tired old bullshit: if they make a profit on an investment they keep it for themselves and if they make a loss they pass it off to the taxpayers or get bailed out.
he must be long[er] windmills and alternative power. One way to squash the competition--buy it out, suck it dry, then push it overboard.
But that's just my paranoia. I'm sure stuff like this doesn't happen for real.
You are probably onto something there. The taxpayer subsidies for the windmills would more than offset any losses suffered by the coal plants. Bill Gates is not stupid. Too bad he turned out to be a crony-corporatist spy-state prick.
Kinda like how Tesla is nothing but a carbon-credit company.
Oh, and BillG is definitely stupid. He left that idiot Balmer with the keys to his castle.
http://www.youtube.com/watch?v=EHCRimwRGLs
Didn't Biden promise to bankrupt coal users?
And watch out for more American cities to file for bankruptcy soon:
http://canadafreepress.com/index.php/article/61048
Blue flame of death?
Has the fad to blame the weather for anything undesirable passed already?
"Bill Gates’ Texas energy company has filed for bankruptcy protection..."
My heart bleeds. As a person, Bill Gates was bankrupt years ago.
Oh noes Bill Gates. You cannot play with mother nature.
C(lie)mate #4 (HD)
Way, way, way cool link! Phenomenal!
Which means he will have to disclose it in the MS Proxy Statement.
I'll never understand the drive people have to start their own company. I'm way too lazy for that. I would rather look for a successful company that already exists then buy shares of it.
I used to work for the man, but I had a hard time sleeping at night, worried if I would still have my job tomorrow. So I opened my own business and now I don't sleep at all.
Anyone know what's going on in that region's energy market? That seems like a huge revenue loss for an area that probably did not see residential rates go down by that much.
I know a lot.
The marginal price in ERCOT is set by natural gas. Gas is so cheap that the dark spreads (spread between coal and gas) have collapsed. Coal even set the margins a couple of times in Texas meaning that a coal plant was the next marginal unit to be called into service.
It's going on in a lot of places. It's a great time to be a gas generator and a bad time to be a coal or nuclear provider. The nuke guys are getting crushed not just in Texas but in PJM, NE ISO, MISO. Fixed costs, margin positive, high maintenance capex, topline hits hurt.
Retail is a different story. Different dynamic in Texas. Depends on how they manage the portfolio. Sort of agnostic to topline for that business
The dynamic of ERCOT is that it is an island immune from real competition. He said recalling being forced to pay almost twice per Mwh my competitors pay in OK. Worse, it is administered by former executives of the somewhat ex monopoly utility..... Afff....stopping here. Fuck the intrinsically corrupt ERCOT. There.. Said it
Further to what you say ERCOT does not have pricing system that encourages building out capacity...
I can't sum it up any better than this:
https://rbnenergy.com/the-night-the-lights-almost-went-out-in-texas-pola...
I know that event very well. It was a very temporary situation on the coldest morning of the year. That plant lost a lot of money not being available for those handful of hours.
But the capacity market would not have mattered. It's not like they were shutting down a plant because they aren't profitable. the plant is profitable and operates mostly according to plan. The capacity construct is being sold by the Harvard Economics department as some sort of great way to encourage new build. That's just not the case in any market it's been adopted from MISO, PJM, NYISO or NEISO. And the reason is simple, the seperately cleared capacity market causes gen to stay on the grid that should have otherwise shutdown years ago. The supply is higher than what it otherwise should be and the energy price falls. When the energy price falls, the heat rates don't support new build. Now you're stuck with an old, dirty fleet that should have shut down years ago that operates unprofitably and looks for RMR payments to keep running. It's a mess. And what the harvard economics department failed to understand is that the energy price is perfectly capable of allocating resources.
Alberta works just fine as an energy-only market and they arguably have bigger challenges than Texas managing the grid.
Who the fuck thought is was a good idea to loan Bill Gates money?? That loan officer should be swinging from a tree!
He was a Wells Fargo subprime lender.
Bill Gates was investing in coal? Shame, shame on such an Obamabot.
Does "do as say, not as I do" ring a bell?
He invested in Egyption Agribusiness while bombs were flying with US F16 aircover
I'd like to see him do for Monsanto what he's accomplished in energy.
Because Obama.
He should of purchased oil leases in Eagle Ford,,DF
Cue: the grid attack...
if he actually lost money it's a tax writeoff somewhere else. taxpayers, ratepayers, pension fund holders of msft common, always foot the bill for maggots like gates.
Optim notes in its court filings that the price of electricity in the company’s market area has fallen roughly 40% in the past five years
I bet consumer retail prices have risen 20% or more over the last 5 years
Just ten months from now...
Meteorologist Joe Bastardi: "89% of coal fired plants that are operating now by supplying electricity will be forced off line on Jan. 1, 2015 by EPA regulations."
In 2011 42% of US electricity as from coal.
In 2015 37% of electricity in the USA will go off line or be switched to expensive alternatives, like gas if the EPA continues to follow through.
Noone's going to be able to can afford skyrocketing energy rates coming.
Obamazuela.
Isn't the lack of energy demand a sort of leading indicator sign-thingy, of advanced economic collapse whoopsies, or something like that?
Is this has anything to do with the bankruptcy?
http://www.huffingtonpost.com/2014/02/13/ivanpah-solar-plant-opens_n_478...
No...
Is this has anything to do with the bankruptcy?
http://www.huffingtonpost.com/2014/02/13/ivanpah-solar-plant-opens_n_478...
This is why I despise Corp status so much. A guy can run up shittons of debt and just be let off the hook even if he's worth billions, just because the legal status of his get rich quick scheme puts the liability on the back of a nameless and faceless entity and the credit holders have to take the hit.
I say, if you start a business, you personally take the hit when shit goes wonky.
Someone is not telling the truth -- and it sure looks like this is just a cover-up to allow a graceful exit for Gates from the coal fired plants. Spot electricity is no where near the cheap price they say:
Electricity Prices Jump From Texas to New York as Demand Rises
By Harry R. Weber - Feb 11, 2014
Spot wholesale electricity prices rose across the eastern half of the U.S. as lower-than-normal temperatures lifted demand above expectations. The low temperature today in Washington may drop to 17 degrees Fahrenheit (minus 8 Celsius), 13 below normal, while in Boston the low may fall to 12 degrees, 12 lower than average, according to AccuWeather Inc. in State College, Pennsylvania. In Houston, the low may reach 31 degrees, 17 below normal.
Spot power at PJM’s benchmark Western hub, which includes Washington, advanced $49.40, or 50 percent, to average $148.77 a megawatt-hour for the hour ended at 10 a.m. from the same time yesterday, grid data compiled by Bloomberg show. Prices at the Eastern hub, which includes New Jersey, rose $55.44, or 53 percent, to average $159.38.
PJM West on-peak power traded $19.92 below the Eastern hub, compared with a discount of $9.22 yesterday and a three-month average discount of $11.55 for PJM West.
In Texas, spot prices at the North hub, which includes Dallas, advanced $31.21, or 51 percent, to average $92.41 a megawatt-hour for the hour ended at 9 a.m. local time from the same time yesterday, while Houston hub prices jumped $13.72, or 22 percent, to average $74.86. North hub on-peak power traded $19.01 above the Houston hub, compared with a premium of $13.60 yesterday and a three-month average premium of $2.36 for the North hub.
Cold weather is expected to continue later this week in parts of the U.S. as another winter storm hits. Ice, sleet and snow falling across the South today will sweep through the Northeast later this week, forecasts show.
To contact the reporter on this story: Harry R. Weber in Houston at hweber14@bloomberg.net
Those were spot hourly prices. The forwards don't look like that.
Is it right that Steve Jobs is dead and Bill Gates breathes on?
Let me guess - it's the WEATHER! All those ice storms knocked down the power lines, reducing the demand for electricity????
yessirree bob....
spot prices at henry hub have collapsed from $2.6o a couple of years ago, all the way down to $5.37 for the March contracts today ....
but the REAL story is being played out at the NY and Boston hubs, where during the middle of some of these colder nights the local utilities have paid as much as $120.00 (yes, I got the decimal in the right place) for the same gas ... and exactly who is it buying these utility stocks thinking that they are making money when their rates are all regulated and controlled by local govenrments???????
The local utilities did not pay have not paid that much.
nose this
bill gates dad wanted you dead.
like father like son.
you are useless goy take your gmo,everytime you are told to take the vaccine take it.
drink pepsi and coke eat and drink corn syrup sucralose make corn your friend.
avoid organic dirty ugly foods just buy plastic wrapped stuff.
help out rothschild,rockerfella skank,soros and bill gates.
how can you help them?
by killing yourselves or at the least earting the foods they want you to eat.
Great News!
Maybe it will put a crimp in his plans to eliminate the rest of us. He needs every dime he can get to buy whatever sophisticated death plague he wants to unleash.
If I had the choice, I would actually rather fight the four-eyed fucker in a cage match over Bath House.
http://business.financialpost.com/2014/02/14/tesla-catches-fire-while-si...
Has he tried turning it off and then on again?
Bill's not really a very good businessman. He had one good idea, which was to take advantage of IBM when the opportunity presented itself. That's it. It netted him billions but that doesn't make him "smart".