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CASE STUDY
ENERGY FUTURE
HOLDINGS
Filsinger Energy Partners acted as the lead energy advisor to the debtors, including EFH, Luminant, TXU Energy, and Oncor as a non-debtor, throughout their restructuring.
“While Mr. Filsinger did not find the debtors’ coal plants to be gold plated, I find that these incentive plans define the gold standard.”
- U.S. Bankruptcy Judge Christopher Sontchi, ruling on FEP’s proposed insider compensation plans for EFH
1
Business Plan Development
FEP worked closely with EFH’s management to review the company’s short- and long-term business plans. FEP provided independent assessments of these plans to the company and court throughout the restructuring.
Business Plan Development
2
Compensation Plan Review
As required by Chapter 11, the courts reviewed EFH’s insider and non-insider compensation plans to ensure that the plans met industry guidelines, and to verify that the insider plans were primarily incentivizing. FEP validated each compensation metric and assisted the company in developing new metrics to meet the court’s standard.
Ultimately, FEP testified to its independent assessment in court. Upon ruling for approval of the insider compensation plans in favor of the company, U.S. Bankruptcy Judge Christopher Sontchi stated, “While Mr. Filsinger did not find the debtors’ coal plants to be gold plated, I find that these incentive plans define the gold standard.”
Compensation Plan Review
4
Cost Reductions and Rationalization
FEP assisted Luminant with the development of cost rationalization plans. FEP’s analyses supported and enhanced Luminant’s cost reductions, deferrals of capital expenditures, and decisions to move some of the company’s coal plants to seasonal operations.
5
Retail Market Modeling and Analysis
FEP applied its proprietary retail electric market model to independently analyze TXU Energy’s business plans and projections of customer acquisition and retention, margins, energy supply costs, and corporate support expenses. This model incorporates exogenous market factors, as well as competitor behavior.
3
EBITDA Projections
For each of the company’s business plans, FEP developed independent EBITDA projections. These projections supported the court’s review of the business plans throughout the case.
EBITDA Projections
Cost Reductions and Rationalization
Retail Market Modeling and Analysis
6
Environmental Review
FEP reviewed the environmental status of each of Luminant’s power plants to determine the outlook and potential capital expenditure profiles to ensure compliance.
Environmental Review
7
Property Tax Litigation
FEP developed asset appraisals and analyses in support of Luminant’s appeal of property tax assessments at a number of its plants. FEP also provided litigation testimony and support when required.
Property Tax Litigation
OTHER RECENT PROJECTS
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Analysis of major portfolio of power generating facilities in preparation of merger of two international entities.
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Analysis of AEP and Dynegy assets for confidential client.
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Assessment of the risk that coal producer Foresight Energy’s power plant customer base will retire over a 10-year horizon due to US EPA regulations.
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Worked for a confidential bidder for the ENGIE portfolio, providing due diligence services in support of its bid.
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Engaged by Indiana Michigan Power Company, a subsidiary of AEP, to prepare an estimate of the fair value of the Indiana Michigan system for Indiana jurisdictional rate-making purposes.
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