Continued operation of bankrupt NRG Energy’s generating assets, including those located in the northeastern part of the U.S., remains among the bankrupt company’s “highest corporate priorities,” NRG President John Boken told FERC in a letter sent to the federal agency on Thursday.

FERC on July 23 ordered NRG to file plans at the Commission “to assure continued performance of its generating units” in the Northeast in the event that affiliate NRG Power Marketing Inc., which is also in Chapter 11 proceedings, is forced to liquidate.

NRG Power Marketing recently claimed that a power supply contract it has with Connecticut Light & Power Co. (CL&P) may cause NRG Power Marketing’s liquidation. Specifically, NRG Power Marketing warned FERC that if it is forced to continue supplying power to CL&P under a standard offer service agreement, it will be facing permanent insolvency in a matter of weeks and possibly complete liquidation. That, in turn, could take as much as 6,700 MW off the market in New York and Connecticut later this summer.

Liquidating NRG Power Marketing “is not a desirable event from NRG’s perspective,” Boken told FERC in his response to the agency. He noted that NRG Energy’s business model for the efficient ongoing operation of its assets include NRG Power Marketing as the entity that secures the fuel for the plants, markets the plants’ output and manages the contracts and customer relationships associated with most of NRG Energy’s generating assets. “It is NRG’s opinion that this existing structure creates more value than any alternative,” Boken said.

As such, NRG Energy and NRG Power Marketing, which has also filed for Chapter 11 protection, have been “working diligently” on a number of fronts to prevent or avoid the liquidation of NRG Power Marketing, according to Boken.

Among other things, he said that both companies have engaged in “constructive discussions” with Connecticut Attorney General Richard Blumenthal and CL&P in an attempt to resolve the dispute in a way that:

Boken said those discussions have included the presentation of alternative proposals to CL&P and Blumenthal “that we believe should be attractive to CL&P and, importantly, its retail ratepayers,” and that would also allow NRG Power Marketing to continue as a going concern and thus eliminate the risk to reliability posed by a potential liquidation of the bankrupt power marketer.

©Copyright 2003 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.