Panda Temple I plant files for Chapter 11 bankruptcy
Panda Temple Power has filed for Chapter 11 bankruptcy for its Temple I power plant, Panda Vice President of Public Affairs Bill Pentak confirmed Thursday.
Only one of the two Temple facilities is affected by the filing. Pentak said the state’s struggling energy sector was a key contributor to the decision. However, the company intends to restructure and continue operations.
“The power prices are very, very low and it’s putting stress on a lot of Texas generators,” Pentak said. “That plant is a great plant and we would foresee that it would continue to operate. We’ve got people who are getting debt financing so that it can keep running.”
Panda Temple Power voluntarily filed for Chapter 11 protection in Delaware April 17. In its filing declaration, the company stated that the Electronic Reliability Council of Texas (ERCOT) presented false claims to the company about the state of the industry.
“The debtors believe that the CDR Reports sponsored by ERCOT prior to the debtors’ construction of the Temple I Facility were false and misleading and, as a result, the debtors have asserted claims against ERCOT for, among other things, negligent misrepresentation, fraud, and breach of duty,” the company said in the filing. “The damage caused by ERCOT’s actions is one of the principal causes of the debtors’ financial hardships and the lower than forecast pricing has had significant negative impacts on the debtors’ revenue, cash flows and liquidity.”
The Tax Appraisal District of Bell County website lists an appraised value of $270 million for Panda’s property at 2898 Lorraine Drive. The company paid $5.6 million in property taxes in 2016.
Marvin Hahn, Bell County chief appraiser, said it’s unknown how the bankruptcy filing will affect property values for the upcoming fiscal year, but he does expect it to make an impact.
“If a business files bankruptcy and they close down, obviously that value is going to be reduced on the real estate, and the personal property is going to disappear from the tax roll at some point,” Hahn. “A going concern like that, depending on how it affects their income and their performance will have an effect on the value of the property.”
Pentak said the plant has a staff of 35 employees.
City of Temple spokeswoman Shannon Gowan said the city was informed of the filing April 18 and that the city has been in close contact with county appraisal district regarding the impact on property valuations.
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