In re PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE, Debtor.
United States Bankruptcy Court, D. New Hampshire.
Richard Levin, for Public Service Co.
Geoffrey B. Kalmus, J. Michael Deasy, for Unsecured Creditors Committee.
Howard J. Berman, for Equity Committee.
Mark W. Vaughn, for Frederick J. Coolbroth, Manchester, N.H., for the State of N.H.
Susan N. Kenneally, for U.S. Trustee.
Barbara Gould Overend, for Citicorp and Consol. Utilities & Communications, Inc. (CUC).
Paul R. Gioia, Examiner, George A. Hahn, for the Examiner.
John B. Nolan, Jeffrey G. Grody, Janice B. Grubin, Janet V. Lanigan, for Northeast Utilities Service Co.
Ted A. Berkowitz, New York City, for First Fidelity, Nat. Ass'n, New Jersey, Indenture Trustee.
Bradford Paul Anderson, Newton, Mass., for New England Power Service.
Robert C. Richards, for Martin Rochman, Edward Kaufman, and Robert Richards.
MEMORANDUM AND ORDER DISALLOWING INDEPENDENT POWER PRODUCER CLAIMS
JAMES E. YACOS, Bankruptcy Judge.
Various independent power producers (IPPs) filed proofs of claims in this chapter 11 case. Most of the claims were either fixed claims for power sold to the debtor before the commencement of the case or contingent claims for rejection or anticipatory breach of the arrangements under which the IPPs sell power to the debtor. These arrangements are either rate orders of the New Hampshire Public Utilities *805 Commission (the "NHPUC") or contracts between the debtor and the IPP. Public Service Company of New Hampshire filed objections to the claims of the IPPs. A hearing was held on the objections on April 13, 1990, at which numerous claimants were represented.
The Third Amended Joint Plan of Reorganization of Northeast Utilities Service Company et al., which has been the subject of confirmation hearings for six days during the weeks of April 2 and April 9, 1990, provides for assumption of all of these arrangements. Neither the Plan nor Public Service takes a position on whether the NHPUC rate orders constitute executory contracts within the meaning of section 365 of the Bankruptcy Code.
The Plan contemplates that after reorganization, the reorganized debtor may seek, either through NHPUC procedures and under and consistent with New Hampshire law or through voluntary renegotiation with the IPPs, to modify the prices and other terms of the arrangements under which the reorganized debtor would continue to buy power from these IPPs. Neither the Plan nor its feasibility is dependent on success in this effort. Under the Plan, most of the benefits of a reduction in the price paid under the IPP arrangements would inure to the benefit of the reorganized debtor's customers. Only 10% of the benefits of reductions in the prices paid to only thirteen IPPs listed in the Rate Agreement on which the Plan is based would inure to the benefit of the reorganized debtor.
The IPPs argue that they are entitled to the allowance in this chapter 11 case of unsecured claims in the aggregate amount of over $600 million on account of any damage they may suffer as a result of any modification ordered by the NHPUC in, or agreed to by themselves through renegotiation of, their power sale arrangements with the reorganized debtor after the Effective Date of the Plan. They do not argue that the reorganized debtor will be unable to perform the arrangements according to their terms, nor did they file any objection to assumption of the arrangements or to confirmation of the Plan on that ground. Rather, they argue that the Plan provision that evidences the reorganized debtor's intent to seek modification of the arrangements under State law fails the test of "adequate assurance of future performance" of the existing arrangements, as required by section 365(b) of the Bankruptcy Code, because, if the reorganized debtor is successful in obtaining modification of the arrangements, the reorganized debtor will not be performing the arrangements as they currently exist.
Public Service objected to the allowance of any such claims. Public Service also objected to the allowance under the Plan as Class 10 (general unsecured) claims of any claims for power sold to the debtor before the commencement of this case for which the debtor had not yet paid, contending that any such claim would be paid as a cure of defaults under the power purchase arrangement, as required by section 365(b) of the Bankruptcy Code.
It is clear from the terms of the Plan, and the IPPs do not dispute, that the Plan provides for assumption of the power sale arrangements, subject to the reorganized debtor's intent to seek modification of the arrangements under State law after the Effective Date of the Plan. It is also clear from the record in this case, and the IPPs do not dispute, that the reorganized debtor is fully capable of performing the power sale arrangements according to their terms as they currently exist.
The only real question is whether contingent claims for over $600 million should be allowed on the theory that the Plan includes a Rate Agreement under which the reorganized debtor will seek modification, with the support of the State of New Hampshire, of the arrangements by the NHPUC, or will seek to renegotiate the arrangements with the IPPs. The issue is whether there is any present claim against this debtor based on these facts.
This Court finds that there is no anticipatory breach theory available to the IPPs based on these facts. The Plan and the Rate Agreement do not indicate breach. All that is contemplated is renegotiation or *806 a petition to the NHPUC, which may or may not have the power to order modification. If it does not have any such power, or if there is no right in the arrangement to modify, then the modification will not happen and the IPPs will suffer no damage. If the NHPUC does have such a power, and if there is a right to modify, as determined by the NHPUC in the proceeding that the reorganized debtor might commence, then the modification will not constitute a breach of the arrangement, and the IPP will not be entitled to any damages against the debtor or the reorganized debtor for a breach. The NHPUC might attach various terms and conditions to any modification which could include changed obligations on the part of the reorganized debtor, but this possibility does not create a present claim, contingent or noncontingent, against either the debtor or the reorganized debtor.
For the foregoing reasons, all objections to the claims of the IPP for contingent breach or rejection of the power sale arrangements should be sustained, and it is
ORDERED:
1. The objections of Public Service to the claims of the IPPs listed in paragraph 6 of this Order on the grounds that the claims constitute contingent claims for damages arising from rejection under the Plan of executory power sale arrangements are sustained.
2. The objections of Public Service to the allowance as general unsecured claims in Class 10 under the Plan of the claims of the IPPs listed in paragraph 6 of this Order on the grounds that the claims are for power sold to the debtor before the commencement of this chapter 11 case, which will be paid on the Effective Date of the Plan, are sustained, except that
(a) this Order is without prejudice to the determination of the actual amount owing for power sold and not yet paid for; and
(b) the payment under the Plan on the Effective Date of the amounts actually allowed for power sold shall be with interest at the legal rate from the date on which such payments would have been due but for the commencement of the chapter 11 case to the date of payment.
3. Paragraphs 1 and 2 of this Order shall become void if confirmation of the Third Amended Joint Plan of Reorganization of Northeast Utilities Service Company et al. is denied or if the order of confirmation is vacated for any reason, including the failure of the Effective Date of the Plan to occur, as provided in the Plan.
4. Based on the stipulation of Public Service and the claimant on the record at the hearing, the objection of Public Service to Claim No. 8829900008 of American Hydro, Inc. Peterborough, in the amount of $1700.00 for a prepetition prepayment for an interconnect study is sustained, and the claim is disallowed, without prejudice to any dispute between Public Service and the claimant over Public Service's performance of the interconnect study after the commencement of this case.
5. The objection of Public Service to Claim No. 8827700010 of Hillsboro Mills in the amount of $13,296.00 is sustained, and the claim is disallowed.
6. The claims to which paragraph 1 and 2 of this Order apply are listed on the Appendix to this Order.
DONE and ORDERED.
APPENDIX
CLAIMANT CLAIM NO. CLAIM AMOUNT
------------------------------------------------------------------------------
Alden Engineering Company
Greenville Road, RR # 1
Box 213
Mason, NH 03048
XXXXXXXXXX 2,771.40
*807
CLAIMANT CLAIM NO. CLAIM AMOUNT
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Alexandria Power Assoc. Ltd. Ptn.
c/o Legeis Resources, Inc.
1200 Crown Colony Drive
Quincy, MA 02169
XXXXXXXXXX 43,435,917.00
XXXXXXXXXX 348,935.00
Ashuelot/HDI Associates, Inc.
10394 W. Chatfield Ave., Suite 108
Littleton, CO 80127
XXXXXXXXXX 3,091,427.30
Avery Hydroelectric Assoc.
Box 240, 36 Bay Street
Manchester, NH 03105
XXXXXXXXXX 24,509.89
XXXXXXXXXX 1,358,294.89
Beech River Mill Company
Old Route 16
Center Ossippee, NH 03814
XXXXXXXXXX 2,099.61
XXXXXXXXXX 2,099.61
Bethlehem Hydro Electric Co.
86 Lafayette Road, Box 947
North Hampton, NH 03862
XXXXXXXXXX 1,700.00
Bio Energy Corporation
Route 127
Hopkinton, NH 03301
XXXXXXXXXX 923,522.60
XXXXXXXXXX 59,830,443.90
Boston Felt Company
on the Salmon Falls River
P.O. Box 6258
E. Rochester, NH 03867
XXXXXXXXXX 4,125.60
XXXXXXXXXX 278,494.60
XXXXXXXXXX 4,125.60
Briar Hydro Associates
114 State Street
Boston, MA 02109
XXXXXXXXXX 167,092.59
XXXXXXXXXX 8,566,683.59
Bridgewater Power Company LP
c/o Comm. Energy Alternatives
1200 East Ridgewood Avenue
Ridgewood, NJ 07450
XXXXXXXXXX 1,518,382.68
XXXXXXXXXX 1,518,382.68
XXXXXXXXXX 1,518,382.68
XXXXXXXXXX 81,508,705.60
Steven V. and Holly M. Brown
P.O. Box 1371
Dover, NH 03820
XXXXXXXXXX 11.11
Chamberlain Falls Hydro Station
Greenville Road, RR # 1
Box 213
Mason, NH 03048
XXXXXXXXXX 963.19
Charwill Realty
Badger Bond Hydro
P.O. Box 689
Meredith, NH 03253
XXXXXXXXXX 7,317.28
*808
CLAIMANT CLAIM NO. CLAIM AMOUNT
-----------------------------------------------------------------------
Chrysler Capital Corp.
Greenwich Office Park I
Attn: Corporate Finance Group
Greenwich, CT 06836
XXXXXXXXXX 8,000,000.00
XXXXXXXXXX 12,000,000.00
Clement Dam Development, Inc
P.O. Box 1011
Portsmouth, NH 03801
XXXXXXXXXX 113,004.00
XXXXXXXXXX 3,770,266.87
Cocheco Falls Associates
P.O. Box 1073
Dover, NH 03820
XXXXXXXXXX 41,229.10
XXXXXXXXXX 1,147,467.30
Concord Steam Corporation
P.O. Box 1377
Concord, NH XXXXX-XXXX
XXXXXXXXXX 86,697.90
Consolidated Hydro Maine, Inc.
c/o Consolidated Hydro, Inc.
2 Greenwich Plaza
Greenwich, CT 06830
XXXXXXXXXX 3,298,973.69
XXXXXXXXXX 12,312.69
Consolidated Hydro New Hampshire, Inc.
c/o Consolidated Hydro, Inc.
2 Greenwich Plaza
Greenwich, CT 06830
XXXXXXXXXX 756,557.00
XXXXXXXXXX 1,426,269.29
XXXXXXXXXX 1,533,996.25
XXXXXXXXXX 53,320.25
XXXXXXXXXX 74,661.29
Paul Crane
172 Main Street
Lancaster, NH 03584
XXXXXXXXXX 331.21
Errol Hydroelectric Limited Partnership
c/o Swift River/Hafslund Company
100 Commercial Street
Portland, Maine 04101
XXXXXXXXXX 10,438,651.40
XXXXXXXXXX 274,111.40
Exeter River Hydro
c/o Paul T. Phillips
Main Street
Freemont, NH 03044
XXXXXXXXXX 45,299.98
XXXXXXXXXX 689.98
Fisk Hydro, Inc.
P.O. Box 2520
So. Hamilton, MA 01982
XXXXXXXXXX 16,603.57
Franklin Falls
P.O. Box 216
Franklin, NH 03235
XXXXXXXXXX 73,415.12
Franklin Industrial Complex
Smith & Canal Streets
Franklin, NH 03235
XXXXXXXXXX 59,885.79
*809
CLAIMANT CLAIM NO. CLAIM AMOUNT
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Garland Mill
RD1 Garland Road
Lancaster, NH 03584
XXXXXXXXXX 268.11
Goodrich Falls Hydro Electric
P.O. Box 152
Lowell, MA 01853
XXXXXXXXXX 25,086.69
XXXXXXXXXX 25,086.69
Golden Pond Hydropower Associates
c/o Mainstreet Associates
George K. Lagassa
110 Lafayette Road, P.O. Box 947
North Hampton, NH 03862
XXXXXXXXXX 9,734.26
XXXXXXXXXX 342,744.26
Gregg Falls Hydroelectric Associates
c/o Schooner Capital Corporation
99 Bedford Street
Boston, MA 02111
XXXXXXXXXX 6,508,083.97
XXXXXXXXXX 80,872.97
Hadley Falls Assoc.
Box 240, 36 Bay Street
Manchester, NH 03105
XXXXXXXXXX 143,327.33
XXXXXXXXXX 8,236.33
Hemphill Power & Light Company
c/o Thermo Electron of N.H. Inc.
Attn: Parimel Patel
101A First Avenue
Waltham, MA 02254-9047
XXXXXXXXXX 68,643,692.20
XXXXXXXXXX 1,375,390.20
XXXXXXXXXX 1,375,390.20
Hopkinton/HDI Associates I
10394 W. Chatfield Ave., Suite 108
Littleton, Colorado 80127
XXXXXXXXXX 523,117.00
Hydroelectric Dev. Inc. Assoc.
Bay Bank of Boston, NA
175 Federal Street
Boston, MA 02110
XXXXXXXXXX 29,538.00
XXXXXXXXXX 10,962.00
Hydroelectric Dev., Inc.
Michael P. Demos, Pres.
10394 W. Chatfield Ave., Suite 108
Littleton, CO 80127
XXXXXXXXXX 25,260.12
XXXXXXXXXX 29,913.30
Hydro-Op One Associates
c/o Schooner Capital Corporation
99 Bedford Street, 2nd Floor
Boston, MA 02111
XXXXXXXXXX 2,224,003.00
XXXXXXXXXX 64,953.00
James River
New Hampshire Electric Inc.
650 Main Street
Berlin, NH 03570
XXXXXXXXXX 5,941.16
*810
CLAIMANT CLAIM NO. CLAIM AMOUNT
---------------------------------------------------------------------------
Lakeport Hydroelectric Corp.
Box 240, 36 Bay Street
Manchester, NH 03105
XXXXXXXXXX 1,550,661.15
XXXXXXXXXX 25,004.15
Lochmere/HDI Associates I
10394 W. Chatfield Ave., Suite 108
Littleton, CO 80127
XXXXXXXXXX 2,024,039.00
Lower Robertson Dam/HDI Associates III
10394 W. Chatfield Ave., Suite 108
Littleton, CO 80127
XXXXXXXXXX 3,332,193.12
Mad River Power Associates
c/o Ransmeier & Spellman
P.O. Box 1378
Concord, NH XXXXX-XXXX
XXXXXXXXXX 1,035,931.41
XXXXXXXXXX 5,722.41
Marlow Power
44 Hanover Street
Keene, NH 03431
XXXXXXXXXX 8,586.00
XXXXXXXXXX 8,586.00
Micon Wind Turbines, Inc.
1435 Frazee Rd, 305
San Diego, CA 92108-1336
XXXXXXXXXX 6,423.74
XXXXXXXXXX 4,869.35
Mine Falls Hydroelectric Limited Partnership
c/o Paul F. Avery, Jr.
178 Drinkwater Road
Kensington, NH 03833
XXXXXXXXXX 148,569.96
XXXXXXXXXX 148,569.96
Minnewawa Hydro Company, Inc.
c/o Consolidated Hydro, Inc.
2 Greenwich Plaza
Greenwich, CT 06830
XXXXXXXXXX 2,754,340.00
XXXXXXXXXX 10,940.00
Monadnock Paper Mills, Inc.
Attn RC Van Horn
Antrim Road
Bennington, NH 03442
XXXXXXXXXX 4,950.00
Mount Washington
Attn Howard M Wemyss
P.O. Box 278
Gorham, NH 03581
XXXXXXXXXX 53.82
Nashua Hydro Associates
c/o Essex Hydro Associates
114 State Street
Boston, MA 02109
XXXXXXXXXX 3,111,077.08
XXXXXXXXXX 82,015.08
*811
CLAIMANT CLAIM NO. CLAIM AMOUNT
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Neaf/Manchester
PO Box 7, 124 Sills Road
Energy Tactics, Inc.
Yaphank, NY 11980
XXXXXXXXXX 1,702.29
New Hampshire Hydro Associates
c/o Essex Hydro Associates
114 State Street
Boston, MA 02109
XXXXXXXXXX 5,819,386.00
XXXXXXXXXX 315,650.00
Newfound Hydroelectric Company
4 Midland Street
Concord, NH 03301
XXXXXXXXXX 4,664,547.20
XXXXXXXXXX 35,620.11
Pembroke Hydro Associates
c/o Schooner Capital Corporation
99 Bedford Street
Boston, MA 02111
XXXXXXXXXX 5,941,183.02
XXXXXXXXXX 106,999.02
Penacook Hydro Associates
c/o Essex Hydro Associates
114 State Street
Boston, MA 02109
XXXXXXXXXX 9,370,416.84
XXXXXXXXXX 267,346.84
Pinetree Power, Inc.
Westinghouse Building
Gateway Center
Pittsburgh, PA 15222
XXXXXXXXXX 1,570,067.15
Pittsfield Hydropower Co.
P.O. Box 149-A
Hamilton, MA 01936
XXXXXXXXXX 17,586.09
River Street Associates
River Street
Peterborough, NH 03458
XXXXXXXXXX 286,252.05
XXXXXXXXXX 181,591.98
XXXXXXXXXX 14,311.03
Bruce P. Sloat
P.O. Box 424
Lost Nation Road
Lancaster, NH 03584
XXXXXXXXXX 227.39
Somersworth Hydro Company, Inc.
c/o Consolidated Hydro, Inc.
2 Greenwich Plaza
Greenwich, CT 06830
XXXXXXXXXX 1,278,402.36
XXXXXXXXXX 35,286.36
Steels Pond Hydro, Inc.
PO Box 2520
S. Hamilton, MA 01982
XXXXXXXXXX 33,352.42
Sugar River Hydroelectric Power
PO Box 293
Newport, NH 03773
XXXXXXXXXX 8,343.11
*812
CLAIMANT CLAIM NO. CLAIM AMOUNT
---------------------------------------------------------------------------
Sunnybrook Hydro # 1
RFD # 2 Box 40
Lancaster, NH 03584
XXXXXXXXXX 231.46
XXXXXXXXXX 231.46
Swans Falls Corporation
PO Box 40
South Windham, ME 04082
XXXXXXXXXX 22,127.02
Thomas Hodgson & Sons Inc.
Canal Street
Suncook, NH 03275
XXXXXXXXXX 37,735.24
Timco Inc.
Depot Street
Ctr. Barnstead, NH 03225
XXXXXXXXXX 264,082.20
XXXXXXXXXX 264,082.20
XXXXXXXXXX 15,182,095.90
Town of Sunapee, a NH Municipality
Main Street, P.O. Box 717
Sunapee, NH 03782
XXXXXXXXXX 849,583.00
XXXXXXXXXX 15,519.19
Watson Associates
P.O. Box 1073
Dover, NH 03820
XXXXXXXXXX 867,081.79
XXXXXXXXXX 14,064.79
W.M. Lord Excelsior
Division of Siemon Company
Carl N. Siemon, President
60 Echo Lake Rd., Box 400
Watertown, CT 06795
XXXXXXXXXX 2,094.10
Whitefield Biomass Energy Corp.
c/o Chrysler Capital Corp.
Greenwich Office Park I
Attn: Corporate Financing Grp.
Greenwich, CT 06836
XXXXXXXXXX 35,000,000.00
XXXXXXXXXX 35,000,000.00
Whitefield Power & Light Co
101 First Avenue
Waltham, MA 02254
XXXXXXXXXX 35,000,000.00
XXXXXXXXXX 68,466,197.00
Woodsville/Rochester
P.O. Box 689
Meredith, NH 03253
XXXXXXXXXX 2,293.92