Update: On May 23, 2014, DP&L filed an Amended Supplemental Application to Transfer or Sell its Generation Assets. DP&L states that it is still weighing two options – transfer to an affiliate and possible sale to a third party. For the sale to a third party, DP&L states that it would first transfer to an affiliate and then the affiliate would sell the generation assets to a third party. For the transfer to an affiliate, DP&L proposes to transfer the assets at fair market value to an unregulated affiliate via distribution and contribution of those assets. The assets would then be distributed from GenCo to DPL Inc.
DP&L does not plan to transfer any debt into or issue debt from an affiliate. Instead, DP&L plans to reduce the current debt prior to the transfer. DP&L also states that it must obtain a release on the first mortgage lien on the generation assets in order to transfer the generation assets outside of DP&L to an unregulated affiliate.
DP&L states that it cannot sell its generation assets to an affiliate before 2017, but can sell to a third party for cash this year because the cash could be used to assist DP&L and DPL Inc. to pay down debt and offset other bond-related costs. In the event the sale occurs in 2014/2015, DP&L plans to:
- Immediately prior to the closing of the sale, transfer specified generation assets and liabilities of DP&L’s electric generation business (the “Asset Transfer”) to a newly-formed Delaware limited liability company, GenCo subsidiary, pursuant to an Asset Contribution Agreement; and
- Immediately following the Asset Transfer, distribute all of its interests in GenCo subsidiary to DPL Inc.
The contract for the sale of assets would be between DPL Inc. and a prospective buyer.
DP&L proposes that any financial statement impacts that occur as a result of the sale should not be counted as part of the SEET because the sale would create an artificial increase in DP&L’s ROE.
The Application still requests that DP&L be able to maintain its environmental liabilities associated with its historic ownership of its generation facilities.
On May 27, 2014, the OCC filed a reply in support of its motion to compel discovery responses.
