California Natural Gas Power Company La Paloma File Chapter 11 Bankruptcy

by San Antonio Attorney

A California-based natural gas-fired power plant filed for Chapter 11 bankruptcy, blaming stricter regulations and a movement toward renewable energy for generation of power.  It had warned of closing down the company earlier.

La Paloma Generating Co.  LLC is a 1,200 megawatt cycle plant located northwest of L.A.  The company filed for bankruptcy on December 6, stating $524 million of liabilities.

According to court filings, La Paloma attributed market factors such as slower increase in the demand of electricity and development of renewable generation resources and tougher government regulations, for the company’s decline.

La Paloma is run by Rockland Capital LLC, which is one of the plant operators that have sought help from the state in minimizing their losses.  The energy companies argue that the state should provide assistance to the natural gas energy companies because they supply stable and reliable power grid.

A sudden glut of natural gas supply and a surge in renewable energy has weakened power prices and endangered the feasibility of natural gas plants that provide electricity in the state.

Court filings of La Paloma show that it had chosen to file Chapter 11 for the sake of its stakeholders and creditors, after consulting with legal and financial advisers.

La Paloma’s lenders are SunTrust Bank and Bank of America Corp.  Some of its creditors are Pacific Gas & Electric Co., the West Kern Water District and Alston Power Inc.

If you are considering filing for bankruptcy, you should consult a Bankruptcy Lawyer San Antonio to help you decide if it’s the right option for you.  Ask about the pros and cons of bankruptcy, the different types of bankruptcy, alternative options you have, and more.

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