California Gas-Fired Plant Files for Bankruptcy


By Editors of Power Engineering

The owners of a gas-fired power plant in California filed for chapter 11 bankruptcy protection, blaming market factors and an “inhospitable regulatory environment.”

La Paloma Generating Co LLC is the owning entity for the 1,022-MW combined-cycle plant 110 miles northwest of Los Angeles, and claims $524 million in debt, Reuters reported.

The filing also blamed the bankruptcy on slow-growing electrical demand and rising renewable generation sources in the state.

La Paloma is owned by Rockland Capital LLC, which had previously sought state help in offsetting losses. The company argued it was in the state’s best interest to support natural gas plants to keep California’s power grid stable and reliable.

Reuters noted an oversupply of natural gas and a renewable energy boom has caused power prices to fall.

In a June filing with the Federal Energy Regulatory Commission, La Paloma indicated the plant may shut down without assistance in the form of a Reliability Must Run designation.  

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