Xcel Energy CFO Richard Kelly told analysts Thursday that the company is confident its merchant power subsidiary, NRG Energy, will emerge from bankruptcy this fall, probably in late November. He said it was the company’s top priority to make that happen.

NRG filed a voluntary, prepackaged Chapter 11 bankruptcy plan in May after a series of credit rating downgrades led to accelerated debt payment obligations that it could not make the previous fall (see Power Market Today, Sept. 16, 2002; May 19, 2003). The plan incorporated the terms of a settlement announced in March in which NRG, Xcel and members of NRG’s major creditor constituencies agreed that Xcel would pay NRG and its creditors of up to $752 million in three payments to restructure its debt.

The comment period on the company’s plan ended last Friday with no interventions, Kelly said. “That’s great news for us. Now we’ll just wait for the SEC to approve that plan of reorganization in bankruptcy, which they should do. We are hopeful that we’ll get that done by the middle of September, and then after that we will send it out to creditors for a vote. We’ll give them 30-40 days to vote. When we get to 85% or better creditors approval, the judge will confirm the plan of reorganization.

“Based on this schedule we should be done in November, toward the end of November. As you may recall we have given ourselves until Dec. 15 to get it done,” he said.

If the plan fails, Xcel will not be able to take a major tax deduction and get a substantial tax refund. It also could face lawsuits if it walks away from the restructuring deal. “I don’t think anybody thinks that’s a real possibility,” said Kelly.

Xcel also reaffirmed its 2003 earnings guidance Thursday at $1.15-1.20/share from continuing operations. Wall Street analysts are expecting the company to earn between $1.10 and $1.30 this year with the average of estimates at $1.17. Last year the company earned $1.43.

Including special one time items, such as a 62 cents/share loss from NRG, a 65 cents/share benefit from the tax effect of settlement payments, 24 cents/share benefit from additional tax refunds from the NRG restructuring and a 5 cents/share gain on the sale of Viking Gas, Xcel expects to earn $1.47-1.52/share this year.

Xcel owns six utilities in 12 states and is the fourth largest combination electric and gas utility company in the United States.

©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.