North Energy LLC has issued a notice to customers informing them that North Energy LLC will no longer be providing gas or electricity services to its customers.

In the communication to customers, North Energy LLC states, "Due to unforeseen circumstances, we regret to inform you that North Energy LLC will no longer be providing gas and/or electricity services to our customers."

In the communication to customers, North Energy LLC states, "Please take note that your gas and/or electricity services will NOT BE DISCONNECTED and will continue to bill with your local utility company."

North Energy Power LLC, the entity under which North Energy served electricity customers, recently filed a voluntary petition under chapter 11 of the United States Bankruptcy Code

North Energy Power LLC (Debtor) alleged in its petition that, "The Debtor's case is being commenced because its primary provider of gas and electric services as well as its primary lender filed its own chapter 11 case in the Eastern District of New York captioned Big Apple Energy, LLC ('Big Apple'), Case No. 18-75807-ast. Prior to Big Apple's filing, Big Apple stopped providing electric services to the Debtor and cut off access to credit that provided the Debtor with the necessary financing to fund the Debtor's operations."

North Energy Power LLC had previously assigned to Big Apples its electricity receivables from consolidated billing at ConEd and O&R, and authorized ConEd and O&R to forward to Big Apple any monies owed to North Energy Power LLC under the consolidated billing agreement

North Energy Power LLC alleged in a court filing that, "Big Apple’s lender has swept Big Apple’s collection accounts, which, on information and belief, included funds belonging to the Debtor’s estates as well as trust fund taxes which were collected from the Debtor’s customers. Without such funding, or access to its receivables, the Debtor has had to seek alternative funding sources."

North Energy Power LLC alleged in a court filing that, "It is the Debtor’s understanding that on October 19, 2018, O&R and Con Edison are prepared to turnover approximately $1,000,000 of the Debtor’s postpetition receivables to Big Apple pursuant to the O&R and Con Edison Letter Agreement. If this were the case, these postpetition receivables would become a part of Big Apple’s bankruptcy estate, making recovery by the Debtor a significantly more involved process. Rejection of the O&R Letter Agreement and Big Apple Master Supply Agreements and related Con Edison Letter Agreement will relieve the Debtor of these burdensome agreements that serve no benefit to the Debtor’s estate and actually divert assets away from the Debtor’s estate."

North Energy Power LLC filed with the bankruptcy court a motion seeking entry of an order authorizing the rejection of the Debtor’s executory contracts with Big Apple Energy LLC and O&R.

The New York ISO said in an October 4 filing that Debtor’s unpaid obligation to the NYISO-administered market for energy purchases continues to grow. NYISO alleged that the Debtor failed to pay a post-petition invoice for services due on September 21 in the amount of $123,732.60. The cure period for this payment default expired on September 24. NYISO alleged the Debtor has failed to pay another post-petition invoice due on September 28 in the amount of $135,679.40.

NYISO on October 9 had filed a motion for relief from the automatic stay, to eliminate the automatic stay as an obstacle to the NYISO’s termination of the Debtor’s right to continue to trade, and, in NYISO's words, "run up what is now a substantial and growing unsecured debt," in the NYISO-administered markets.

In such motion, NYISO alleged, "the Debtor continues to trade in the NYISO-administered market, at the rate of approximately $34,000 per day (approximately $20,000 for energy and $14,000 for capacity), without the liquidity to pay for its activities."

Case No. 18-45304-ess

-- By Paul Ring

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