Georgia's fourth-leading gas marketer files for bankruptcy

AUSTIN - Enron Corp. spinoff NewPower Holdings Inc., which supplies gas and electricity to about 600,000 customers in nine states, including Georgia, filed for Chapter 11 bankruptcy protection Tuesday. <br> <br> The move by the Purchase, N.Y.-based company and its subsidiaries, TNPC Holdings Inc. and The New Power Co., comes a day after it announced it was leaving the Texas market and transferring its 80,000 customers in Houston and Dallas to other electricity providers. <br> <br> NewPower was the fourth-leading natural gas marketer in Georgia, which deregulated its natural gas industry in 1998. <br> <br> Georgia Public Service Commissioners Robert Baker and Lauren ``Bubba&#39;&#39; McDonald Jr. said gas supplies in Georgia were not threatened, and McDonald predicted a ``seamless transition&#39;&#39; to another supplier. <br> <br> The company said the filing in U.S. bankruptcy court in Atlanta would not disrupt customer service. It will move to sell its assets, mostly customer contracts, said spokeswoman Gael Doar. <br> <br> ``By NewPower filing for bankruptcy, we have initiated a process that will allow potential purchasers to acquire our assets free of liability,&#39;&#39; Doar said. <br> <br> Asked about the source of NewPower&#39;s problems, Doar said, ``Certainly the fact that we were affiliated with Enron probably did not help.&#39;&#39; <br> <br> NewPower had contracts with Enron to lock in supplies of electricity and natural gas, which it resold to customers. But those contracts were terminated after Enron filed for bankruptcy protection in December, and NewPower was unable to get similar deals with other companies. <br> <br> Without those Enron contracts, NewPower&#39;s cash flow and profit margins fluctuated. In January, Arthur Andersen LLP told NewPower it would have to express doubt about the company&#39;s ability to remain in business. <br> <br> Management figured the company would need $50 million to $75 million by October to stay afloat, but most parties it approached refused to lend to the company. <br> <br> British energy retailer Centrica PLC had agreed in February to buy all shares of NewPower, including those owned by Enron, for $130 million. The deal fell apart the next month over financial-liability conditions that Centrica had insisted be part of the agreement. <br> <br> In April, New Power announced it would lay off one-third of its work force. <br> <br> As of March 31, the company listed assets of $294 million and liabilities of $130 million. The company reported a loss of $40 million in the first three months of the year on revenue of $172 million. <br> <br> Along the way, NewPower&#39;s stock was dropped from the New York Stock Exchange for failing to break above the $1 per share level. In over-the-counter trading Tuesday, the shares fell 3 cents to close at 2 cents. They traded at $9.20 a year ago. <br> <br> The company serves about 115,000 power customers and about 465,000 gas customers in nine states. Its biggest market is Georgia, where it has more than 200,000 natural gas customers. <br> <br> When Georgia&#39;s natural gas industry was deregulated in 1998, there were 19 marketers. Now there are only eight, and the top four control more than 90 percent of the market. <br> <br> Gas deregulation in Georgia was expected to lower prices, improve customer service and increase competition. Instead, prices spike sharply last winter and there were many complaints about billing problems. <br> <br> NewPower is the fourth gas marketer to go bankrupt in Georgia since deregulation. <br> <br> Some other NewPower markets include Ohio, Pennsylvania and New Jersey.