Case BLS Doc 54 Filed 11/08/17 Page 1 of 3 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE : : : : :

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1 Case BLS Doc 54 Filed 11/08/17 Page 1 of 3 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE x In re ExGen Texas Power, LLC, et al., 1 Debtors x Chapter 11 Case No (BLS) (Jointly Administered) Re Docket Nos. 4 & 48 Hr g Date Dec. 14, 2017 at 1000 a.m. (ET) Obj. Deadline Dec. 7, 2017 at 400 p.m. (ET) NOTICE OF (A) ENTRY OF INTERIM ORDER (I) APPROVING PROPOSED FORM OF ADEQUATE ASSURANCE OF PAYMENT TO UTILITY COMPANIES, (II) ESTABLISHING PROCEDURES FOR RESOLVING OBJECTIONS BY UTILITY COMPANIES, AND (III) PROHIBITING UTILITY COMPANIES FROM ALTERING, REFUSING, OR DISCONTINUING SERVICE TO, OR DISCRIMINATING AGAINST THE DEBTORS AND (B) FINAL HEARING THEREON PLEASE TAKE NOTICE that, on November 7, 2017, the above-captioned debtors (collectively, the Debtors ) filed the Debtors Motion for Entry of Interim and Final Orders (I) Approving Proposed Form of Adequate Assurance of Payment to Utility Companies, (II) Establishing Procedures for Resolving Objections by Utility Companies, and (III) Prohibiting Utility Companies from Altering, Refusing, or Discontinuing Service to, or Discriminating Against the Debtors [Docket No. 4] (the Motion ) with the United States Bankruptcy Court for the District of Delaware (the Court ). A copy of the Motion is attached hereto as Exhibit A. PLEASE TAKE FURTHER NOTICE that, following an initial hearing to consider the Motion on November 8, 2017, the Court entered the Interim Order (I) Approving Proposed Form 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, are ExGen Texas Power, LLC (4129), ExGen Texas Power Holdings, LLC (2209), Wolf Hollow I Power, LLC (6945), Colorado Bend I Power, LLC (9083), Handley Power, LLC (4091), Mountain Creek Power, LLC (6288), and LaPorte Power, LLC (5101). The mailing address of each of the Debtors, solely for purposes of notices and communications, is 1310 Point Street, Baltimore, MD RLF v.1

2 Case BLS Doc 54 Filed 11/08/17 Page 2 of 3 of Adequate Assurance of Payment to Utility Companies, (II) Establishing Procedures for Resolving Objections by Utility Companies, and (III) Prohibiting Utility Companies from Altering, Refusing, or Discontinuing Service to, or Discriminating Against the Debtors [Docket No. 48] (the Interim Order ). A copy of the Interim Order is attached hereto as Exhibit B. PLEASE TAKE FURTHER NOTICE that, pursuant to the Interim Order, objections or responses to the final relief requested in the Motion, if any, must be made in writing, filed with the Clerk of the Court, 824 North Market Street, 3rd Floor, Wilmington, Delaware 19801, and served upon and received by the undersigned proposed counsel to the Debtors on or before December 7, 2017 at 400 p.m. (prevailing Eastern Time). PLEASE TAKE FURTHER NOTICE that, pursuant to the Interim Order, the final hearing with respect to the Motion, if required, will be held before The Honorable Brendan L. Shannon at the Court, 824 North Market Street, 6th Floor, Courtroom No. 1, Wilmington, Delaware on December 14, 2017 at 1000 a.m. (prevailing Eastern Time). PLEASE TAKE FURTHER NOTICE THAT, IF NO OBJECTIONS TO THE MOTION ARE TIMELY FILED, SERVED AND RECEIVED IN ACCORDANCE WITH THIS NOTICE, THE COURT MAY GRANT THE FINAL RELIEF REQUESTED IN THE MOTION WITHOUT FURTHER NOTICE OR HEARING. 2 RLF v.1

3 Case BLS Doc 54 Filed 11/08/17 Page 3 of 3 Dated November 8, 2017 Wilmington, Delaware RICHARDS, LAYTON & FINGER, P.A. /s/ Christopher M. De Lillo Daniel J. DeFranceschi (No. 2732) Paul N. Heath (No. 3704) Zachary I. Shapiro (No. 5103) Joseph C. Barsalona II (No. 6102) Christopher M. De Lillo (No. 6355) One Rodney Square 920 North King Street Wilmington, Delaware Telephone (302) Facsimile (302) defranceschi@rlf.com heath@rlf.com shapiro@rlf.com barsalona@rlf.com delillo@rlf.com Proposed Counsel to the Debtors and Debtors in Possession 3 RLF v.1

4 Case BLS Doc 54-1 Filed 11/08/17 Page 1 of 31 EXHIBIT A

5 Case BLS Doc 54-1 Filed 11/08/17 Page 2 of 31 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE x In re ExGen Texas Power, LLC, et al., 1 Debtors x Chapter 11 Case No. 17- ( ) Joint Administration Requested DEBTORS MOTION FOR ENTRY OF INTERIM AND FINAL ORDERS (I) APPROVING PROPOSED FORM OF ADEQUATE ASSURANCE OF PAYMENT TO UTILITY COMPANIES, (II) ESTABLISHING PROCEDURES FOR RESOLVING OBJECTIONS BY UTILITY COMPANIES, AND (III) PROHIBITING UTILITY COMPANIES FROM ALTERING, REFUSING, OR DISCONTINUING SERVICE TO, OR DISCRIMINATING AGAINST THE DEBTORS The above-captioned debtors (collectively, the Debtors ) hereby submit this motion (the Motion ) for entry of an interim order, substantially in the form attached hereto as Exhibit A (the Proposed Interim Order ), and a final order, substantially in the form attached hereto as Exhibit B (the Proposed Final Order and together with the Proposed Interim Order, the Proposed Orders ), pursuant to Sections 105(a) and 366 of title 11 of the United States Code (the Bankruptcy Code ), and Rules 6003 and 6004 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ), (i) approving the proposed form of adequate assurance of payment to the Utility Companies (as defined below), (ii) establishing procedures for resolving objections by Utility Companies, and (iii) prohibiting Utility Companies from altering, refusing, or discontinuing service to, or discriminating against the Debtors on the basis of the commencement of these chapter 11 cases, that a debt owed by the Debtors for prepetition Utility 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, are ExGen Texas Power, LLC (4129), ExGen Texas Power Holdings, LLC (2209), Wolf Hollow I Power, LLC (6945), Colorado Bend I Power, LLC (9083), Handley Power, LLC (4091), Mountain Creek Power, LLC (6288), and LaPorte Power, LLC (5101). The mailing address of each of the Debtors, solely for purposes of notices and communications, is 1310 Point Street, Baltimore, MD Date filed 11/7/17 Docket No. 4

6 Case BLS Doc 54-1 Filed 11/08/17 Page 3 of 31 Services (as defined below) was not paid when due, or on account of any perceived inadequacy of the Debtors Proposed Adequate Assurance (as defined below). In support of the Motion, the Debtors rely upon and incorporate by reference the Declaration of David Rush in Support of Chapter 11 Petitions and First Day Motions (the First Day Declaration ), 2 filed with the Court contemporaneously herewith. In further support of the Motion, the Debtors respectfully represent as follows Jurisdiction and Venue 1. The Court has jurisdiction over the Debtors, their estates, and this matter under 28 U.S.C. 157 and 1334 and the Amended Standing Order of Reference from the United States District Court for the District of Delaware dated as of February 29, This is a core proceeding under 28 U.S.C. 157(b). 2. Venue is proper in this district under 28 U.S.C and Pursuant to Rule (f) of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the Local Rules ), the Debtors consent to the entry of a final order on this Motion if it is determined that the Court, absent consent of the parties, cannot enter final orders or judgments consistent with Article III of the United States Constitution. Background 4. On the date hereof (the Petition Date ), each Debtor filed with this Court a voluntary petition for relief under chapter 11 of the Bankruptcy Code. 5. The Debtors continue to operate their businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No trustee, 2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the First Day Declaration. 2

7 Case BLS Doc 54-1 Filed 11/08/17 Page 4 of 31 examiner, or official committee of unsecured creditors has been appointed in the Debtors chapter 11 cases. 6. Additional information regarding the Debtors and these chapter 11 cases, including the Debtors business operations, capital structure, financial condition, and the reasons for and objectives of these chapter 11 cases, is set forth in the First Day Declaration. Relief Requested 7. By this Motion, the Debtors respectfully request entry of the Proposed Orders, pursuant to sections 105(a) and 366 of the Bankruptcy Code and Bankruptcy Rules 6003 and 6004, (i) approving the proposed form of adequate assurance of payment to the Utility Companies, (ii) establishing procedures for resolving objections by Utility Companies, and (iii) prohibiting Utility Companies from altering, refusing, or discontinuing service to, or discriminating against the Debtors on the basis of the commencement of these chapter 11 cases, that a debt owed by the Debtors for prepetition Utility Services was not paid when due or on account of any perceived inadequacy of the Proposed Adequate Assurance. Utility Services 8. To operate their businesses and manage their properties, the Debtors obtain various utility services, such as electricity, telecommunications, water, sewer and/or other services (each, a Utility Service and collectively, the Utility Services ) from utility companies, as that term is used in section 366 of the Bankruptcy Code (each a Utility Company and collectively, the Utility Companies ). 3 The Utility Companies that provide 3 Constellation NewEnergy, Inc. ( Constellation ), which is an affiliated entity of the Debtors, is the Debtors primary provider of electricity services. The Debtors intend to deal with Constellation on an arm s length basis in the same manner as the parties did before the Petition Date including, to the extent applicable, in connection with any objection to the Motion filed by Constellation or any Additional Assurance Request made by Constellation. 3

8 Case BLS Doc 54-1 Filed 11/08/17 Page 5 of 31 Utility Services to the Debtors as of the Petition Date are those listed on Schedule 1 attached to each respective Proposed Order (the Utility Company List ) Historically, the Debtors have a good payment record with the Utility Companies. To the best of the Debtors knowledge, there are no defaults or arrearages of any significance for the Debtors undisputed invoices for prepetition Utility Services, other than payment interruptions that may be caused by the commencement of these chapter 11 cases. On average, prior to the Petition Date, the Debtors spent approximately $209,000 each month on account of Utility Services. 10. Uninterrupted Utility Services are essential to the Debtors business operations during the pendency of these chapter 11 cases. Should any Utility Company alter, refuse, or discontinue service, even for a brief period, the Debtors business operations could be severely disrupted, and such disruption would jeopardize the Debtors reorganization efforts. Accordingly, the Debtors seek to establish an orderly process for providing adequate assurance to their Utility Companies without hindering the Debtors ability to function as a going concern. The Proposed Adequate Assurance Deposit 11. Pursuant to section 366(b) of the Bankruptcy Code, a utility may alter, refuse, or discontinue a chapter 11 debtor s utility service if the utility does not receive from the debtor adequate assurance of payment within 30 days from commencement of the chapter 11 case. 11 U.S.C Section 366(c)(1) of the Bankruptcy Code defines assurance of payment of postpetition charges as (i) a cash deposit; (ii) a letter of credit; (iii) a certificate of deposit; (iv) a surety bond; (v) a prepayment of utility consumption; or (vi) another form of security that is mutually agreed on between the utility and the debtor or the trustee. 11 U.S.C. 366(c)(1). 4 The inclusion of any entity in, or omission of any entity from, the Utility Company List is not an admission by the Debtors that such entity is, or is not, a utility within the meaning of section 366 of the Bankruptcy Code, and the Debtors reserve all rights and defenses with respect thereto. 4

9 Case BLS Doc 54-1 Filed 11/08/17 Page 6 of The Debtors intend to pay all postpetition obligations owed to the Utility Companies in a timely manner and have sufficient funds to do so. Nevertheless, to provide additional assurance of payment to the Utility Companies, the Debtors propose to deposit approximately $104, (the Adequate Assurance Deposit ) into a segregated, interestbearing account (the Adequate Assurance Account ) within twenty (20) days of the Petition Date. The amount of the Adequate Assurance Deposit equals approximately one half of the Debtors average monthly cost of Utility Services during the 12-month period prior to the Petition Date. 13. The Adequate Assurance Deposit may be adjusted by the Debtors if the Debtors terminate any of the Utility Services provided by a Utility Company, makes other arrangements with certain Utility Companies for adequate assurance of payment, determines that an entity listed on the Utility Company List is not a utility company as defined by section 366 of the Bankruptcy Code, or supplements the Utility Company List to include additional Utility Companies. The Debtors also request that the Adequate Assurance Deposit be automatically available to the Debtors, without further order of the Court, upon the effective date of any plan of reorganization. 14. The Debtors submit that the availability of the Adequate Assurance Deposit, together with their demonstrated ability to pay future utility service in the ordinary course of business (collectively, the Proposed Adequate Assurance ), constitutes sufficient adequate assurance of future payment to satisfy the requirements imposed by section 366 of the Bankruptcy Code. 5

10 Case BLS Doc 54-1 Filed 11/08/17 Page 7 of 31 Proposed Adequate Assurance Procedures 15. To address the right of any requesting Utility Company under section 366(c)(2) of the Bankruptcy Code to seek adequate assurance in an amount above the proposed Adequate Assurance Deposit, the Debtors propose the following procedures (the Adequate Assurance Procedures ) be adopted a) If a Utility Company is not satisfied with the Proposed Adequate Assurance and seeks additional adequate assurance of payment, it must serve a written request (an Additional Assurance Request ) upon (i) the Debtors c/o FTI Consulting, Inc., 2001 Ross Avenue, Suite 300, Dallas, Texas (Attn Peter Heinz) and (ii) counsel for the Debtors, Richards, Layton & Finger, P.A., One Rodney Square, 920 North King Street, Wilmington, Delaware (Attn Daniel J. DeFranceschi, Esq. and Paul N. Heath, Esq.), and the Additional Assurance Request must (i) set forth the amount and form of additional assurance of payment requested; (ii) set forth the type of Utility Services, any account numbers, and the location for which Utility Services are provided; and (iii) set forth why the Utility Company believes the Proposed Adequate Assurance is not sufficient adequate assurance of payment. b) If the Debtors determine, after consultation with the Ad Hoc Committee and with the consent of the Secured Lenders constituting Required Lenders, that the Adequate Assurance Request or any consensual agreement reached in connection therewith is reasonable, the Debtors, without further order of the Court, may enter into agreement(s) granting additional adequate assurance to the Utility Company serving such Adequate Assurance Request and, in connection with such agreement(s), provide the Utility Company with additional adequate assurance of payment, including payments on prepetition amounts owing, cash deposits, prepayments, or other forms of security. c) If the Debtors determine, after consultation with the Ad Hoc Committee, that an Adequate Assurance Request is unreasonable, then they shall, within thirty (30) days after receipt of such Adequate Assurance Request, or such longer period as may be agreed to between the Debtors and the Utility Company, file a motion (the Determination Motion ) pursuant to section 366(c)(3) of the Bankruptcy Code seeking a determination from the Court that the Proposed Adequate Assurance, plus any additional consideration offered by the Debtors, constitutes adequate assurance of payment. Pending notice and a hearing on the Determination Motion, the Utility Company that is the subject of the unresolved Adequate Assurance Request may not alter, refuse, or discontinue Utility Services to the Debtors. 6

11 Case BLS Doc 54-1 Filed 11/08/17 Page 8 of The Debtors request that the Proposed Adequate Assurance shall be deemed adequate assurance of payment for any Utility Company that fails to make an Additional Assurance Request. Any Utility Company that does not make an Additional Assurance Request or otherwise comply with the Adequate Assurance Procedures will be prohibited from altering, refusing, or discontinuing Utility Services, or discriminating against the Debtors, including as a result of the Debtors failure to pay charges for prepetition Utility Services or on account of any perceived inadequacy of the Proposed Adequate Assurance. Subsequent Modification of Utility Company List 17. Despite the Debtors extensive and good faith efforts to identify all of their Utility Companies, it is possible that certain Utility Companies have not yet been identified by the Debtors or included on the Utility Service List (each, an Additional Utility Company and collectively, the Additional Utility Companies ). Thus, promptly upon the discovery of an Additional Utility Company, and without further order of the Court, the Debtors will increase the Adequate Assurance Deposit by an amount equal to approximately two weeks of the Debtors estimated aggregate utility expense for such Additional Utility Company. 18. In addition, the Debtors request that the Court provide that the Additional Utility Companies, subject to the Debtors increasing the Adequate Assurance Deposit by an amount equal to approximately two weeks of the Debtors estimated aggregate utility expense for such Additional Utility Company, are subject to the terms of the orders approving this Motion on an interim and final basis, including the Adequate Assurance Procedures, regardless of when such Additional Utility Company is added to the Utility Company List. 19. The Debtors maintain that the relief requested herein strikes a fair balance between protecting the rights of the Utility Companies and the rights of the Debtors under the 7

12 Case BLS Doc 54-1 Filed 11/08/17 Page 9 of 31 Bankruptcy Code and the need for the Debtors to continue to receive, for the benefit of their estates, the Utility Services upon which they depend. The Debtors do not believe that the Utility Companies will be prejudiced by the Proposed Adequate Assurance, the requirement to provide the Debtors with uninterrupted access to Utility Services, and the procedures for resolving objections to the Proposed Adequate Assurance. Basis for Relief Requested A. The Proposed Adequate Assurance is Sufficient. 20. The policy underlying section 366 of the Bankruptcy Code is to protect debtors from utility service cutoffs upon the filing of a bankruptcy case, while at the same time providing utility companies with adequate assurance that the debtor will pay for postpetition services. See H R. Rep. No , at 350 (1978), reprinted in 1978 U.S.C.C.A.N. 5963, 6306; see also In re Jones, 369 B.R. 745, 748 (B.A.P. 1st Cir. 2007) ( The purpose of 366 is to prevent the threat of termination from being used to collect pre-petition debts while not forcing the utility to provide services for which it may never be paid. ) (quoting Begley v. Philadelphia Elec. Co., 760 F.2d 46, 49 (3d Cir. 1985)). As set forth herein, the relief requested in this Motion is consistent with the Bankruptcy Code s policy goals. 21. Section 366(c) of the Bankruptcy Code was enacted as part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ( BAPCPA ) effective as of October 17, Section 366(c) of the Bankruptcy Code provides clarity as to what constitutes assurance of payment and what factors must be excluded from a court s determination as to the adequacy of the assurance of payment. More specifically, section 366(c)(1) of the Bankruptcy Code defines assurance of payment to mean certain specified forms of security, thereby limiting a court s discretion as to what constitutes other security within the meaning of 8

13 Case BLS Doc 54-1 Filed 11/08/17 Page 10 of 31 section 366(b) of the Bankruptcy Code. Further, section 366(c)(1)(B) of the Bankruptcy Code affirmatively excludes from the definition of assurance of payment the availability of an administrative expense priority claim. In addition, section 366(c)(3)(B) of the Bankruptcy Code eliminates certain factors from consideration that courts prior to the BAPCPA had used to determine whether adequate assurance of payment had been provided While section 366(c) of the Bankruptcy Code clarifies what constitutes assurance of payment and what can be considered in determining whether such assurance is adequate, it is important to recognize that Congress did not abrogate the fundamental premise of section 366(b) of the Bankruptcy Code, or the relevant case law construing such section, by enacting section 366(c) of the Bankruptcy Code. That is, section 366(c) of the Bankruptcy Code, as with section 366(b) of the Bankruptcy Code, provides that the Court is free to determine what amount, if any, is necessary to provide adequate assurance of payment to a utility company. While a court may no longer consider certain facts in determining what constitutes adequate assurance of payment, section 366(c) of the Bankruptcy Code continues to permit a court to determine the amount of deposit necessary to meet the adequate assurance standard. 23. In addition, the applicable standard for assurance of payment continues to be adequate. Courts construing section 366(b) of the Bankruptcy Code have long recognized that adequate assurance of payment does not constitute an absolute guarantee of the debtor s ability to pay. See, e.g., In re Caldor, Inc. - N.Y., 199 B.R. 1, 3 (S.D.N.Y. 1996) ( Section 366(b) requires [a] [b]ankruptcy [c]ourt to determine whether the circumstances are sufficient to provide a utility with adequate assurance of payment. The statute does not require an absolute guarantee of payment. ) (citations omitted), aff d sub nom. Virginia Elec. & Power Co. v. 5 Section 366(c)(4) of the Bankruptcy Code also permits a utility company to recover or offset against a prepetition security deposit without notice or an order of the court. 9

14 Case BLS Doc 54-1 Filed 11/08/17 Page 11 of 31 Caldor, Inc. - N.Y., 117 F.3d 646 (2d Cir. 1997); In re Steinebach, 303 B.R. 634, 641 (Bankr. D. Ariz. 2004) ( Adequate assurance of payment is not, however, absolute assurance.... [A]ll 366(b) requires is that a utility be protected from an unreasonable risk of non-payment ); In re Penn Jersey Corp., 72 B.R. 981, 982 (Bankr. E.D. Pa. 1987) (stating that section 366(b) of the Bankruptcy Code contemplates that a utility receive only such assurance of payment as is sufficient to protect its interests given the facts of the debtor s financial circumstances ). 24. Furthermore, courts have recognized that [i]n deciding what constitutes adequate assurance in a given case, a bankruptcy court must focus upon the need of the utility for assurance, and... require that the debtor supply no more than that, since the debtor almost perforce has a conflicting need to conserve scarce financial resources. Virginia Elec. & Power Co., 117 F.3d at 650 (emphasis in original) (quoting Penn Jersey, 72 B.R. at 985); see also In re Penn Cent. Transp. Co., 467 F.2d 100, (3d Cir. 1972) (upholding lower court s decision that no utility deposits were necessary where such deposits would jeopardize the continuing operation of the [debtor] merely to give further security to suppliers who already are reasonably protected ). 25. The Debtors submit that, given the foregoing, entry of the Proposed Orders is consistent with, and fully satisfies, the requirements of section 366 of the Bankruptcy Code. Far from offering the Utility Companies nominal (or even no) additional assurance of payment, the Debtors have proposed to (a) deposit significant cash amounts for the benefit of the Utility Companies and (b) establish procedures pursuant to which the Utility Companies can seek greater or different security. Such assurance of payment should significantly alleviate if not eliminate any concern of non-payment on the part of the Utility Companies, and is thus clearly adequate. 10

15 Case BLS Doc 54-1 Filed 11/08/17 Page 12 of 31 B. The Adequate Assurance Procedures Are Reasonable and Appropriate. 26. If a Utility Company does not believe the Proposed Adequate Assurance is satisfactory, such Utility Company may serve an Additional Assurance Request pursuant to the Adequate Assurance Procedures described above. The proposed Adequate Assurance Procedures are reasonable because they will ensure that the Debtors Utility Services continue while providing a streamlined process for Utility Companies to challenge the adequacy of the Proposed Adequate Assurance or seek an alternative form of adequate assurance. The Court has the power to approve the proposed Adequate Assurance Procedures pursuant to section 105(a) of the Bankruptcy Code, which provides that a bankruptcy court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of the Bankruptcy Code. 27. In light of the foregoing, the Proposed Adequate Assurance and the proposed Adequate Assurance Procedures are reasonable and the relief requested herein is necessary and appropriate, in the best interests of the Debtors estates and creditors, and therefore should be approved. Reservation of Rights 28. Nothing contained herein is intended or shall be construed as (i) an admission as to the validity of any claim against the Debtors, (ii) a waiver of any of the Debtors or any appropriate party in interest s rights to dispute the amount of, basis for, or validity of any claim against the Debtors, (iii) a waiver of any claims or causes of action which may exist against any creditor or interest holder, or (iv) an approval, assumption, adoption, or rejection of any agreement, contract, lease, program, or policy between any Debtor and any third party under section 365 of the Bankruptcy Code. Likewise, if the Court grants the relief sought herein, any payment made pursuant to the Court s order is not intended to be and should not be construed as 11

16 Case BLS Doc 54-1 Filed 11/08/17 Page 13 of 31 an admission to the validity of any claim or a waiver of any of the Debtors rights to dispute such claim subsequently. The Debtors Satisfy Bankruptcy Rule 6003(b) 29. Bankruptcy Rule 6003(b) provides that, if relief is necessary to avoid immediate and irreparable harm, a bankruptcy court may approve a motion to pay all or part of a claim that arose before the filing of the petition prior to twenty-one (21) days after the Petition Date. Fed. R. Bankr. P. 6003(b). As described herein and in the First Day Declaration, the Debtors estates would suffer immediate and irreparable harm if the relief sought herein is not promptly granted. Based on the foregoing, the Debtors submit that the relief requested herein is necessary to avoid immediate and irreparable harm, and, therefore, Bankruptcy Rule 6003 is satisfied. Request for Waiver of Bankruptcy Rules 6004(a) and (h) 30. To implement the foregoing successfully, the Debtors seek a waiver of the notice requirements under Bankruptcy Rule 6004(a) and the fourteen (14) day stay of an order authorizing the use, sale, or lease of property under Bankruptcy Rule 6004(h). As explained above and in the First Day Declaration, the relief requested herein is necessary to avoid immediate and irreparable harm to the Debtors. Accordingly, ample cause exists to justify the waiver of the notice requirements under Bankruptcy Rule 6004(a) and the fourteen-day (14) stay imposed by Bankruptcy Rule 6004(h), to the extent such notice requirements and such stay apply. Notice 31. Notice of this Motion and any order entered hereon shall be provided to (i) the U.S. Trustee; (ii) the Debtors thirty (30) largest unsecured creditors on a consolidated basis; (iii) counsel to the Ad Hoc Committee; (iv) counsel to the Secured Agent; (v) the United States Attorney s Office for the District of Delaware; (vi) the Securities and Exchange Commission; 12

17 Case BLS Doc 54-1 Filed 11/08/17 Page 14 of 31 (vii) the Internal Revenue Service; (viii) the Utility Companies; and (ix) any other party entitled to notice pursuant to Local Rule (m). Due to the urgency of the circumstances surrounding this Motion and the nature of the relief requested herein, the Debtors respectfully submit that no further notice of this Motion is required. No Prior Request 32. No previous request for the relief sought herein has been made by the Debtors to this or any other court. WHEREFORE, the Debtors respectfully request that the Court enter the Proposed Orders granting the relief requested herein and such other and further relief as the Court may deem proper. Dated November 7, 2017 Wilmington, Delaware RICHARDS, LAYTON & FINGER, P.A. /s/ Daniel J. DeFranceschi Daniel J. DeFranceschi (No. 2732) Paul N. Heath (No. 3704) Zachary I. Shapiro (No. 5103) One Rodney Square 920 North King Street Wilmington, Delaware Telephone (302) Facsimile (302) Proposed Counsel to the Debtors and Debtors in Possession 13

18 Case BLS Doc 54-1 Filed 11/08/17 Page 15 of 31 EXHIBIT A Proposed Interim Order

19 Case BLS Doc 54-1 Filed 11/08/17 Page 16 of 31 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE x In re ExGen Texas Power, LLC, et al., 1 Debtors x Chapter 11 Case No. 17- ( ) Joint Administration Requested Re Docket No. INTERIM ORDER (I) APPROVING PROPOSED FORM OF ADEQUATE ASSURANCE OF PAYMENT TO UTILITY COMPANIES, (II) ESTABLISHING PROCEDURES FOR RESOLVING OBJECTIONS BY UTILITY COMPANIES, AND (III) PROHIBITING UTILITY COMPANIES FROM ALTERING, REFUSING, OR DISCONTINUING SERVICE TO, OR DISCRIMINATING AGAINST THE DEBTORS Upon the motion (the Motion ) 2 of the above-captioned debtors (collectively, the Debtors ) for entry of interim (this Interim Order ) and final orders, pursuant to sections 105(a) and 366 of title 11 of the United States Code (the Bankruptcy Code ), and rules 6003 and 6004 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ), (i) approving the proposed form of adequate assurance of payment to the Utility Companies, (ii) establishing procedures for resolving objections by Utility Companies, and (iii) prohibiting Utility Companies from altering, refusing, or discontinuing service to, or discriminating against the Debtors on the basis of the commencement of these chapter 11 cases, that a debt owed by the Debtors for prepetition Utility Services was not paid when due, or on account of any perceived inadequacy of the Debtors proposed adequate assurance, all as further described in the Motion; 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, are ExGen Texas Power, LLC (4129), ExGen Texas Power Holdings, LLC (2209), Wolf Hollow I Power, LLC (6945), Colorado Bend I Power, LLC (9083), Handley Power, LLC (4091), Mountain Creek Power, LLC (6288), and LaPorte Power, LLC (5101). The mailing address of each of the Debtors, solely for purposes of notices and communications, is 1310 Point Street, Baltimore, MD Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Motion.

20 Case BLS Doc 54-1 Filed 11/08/17 Page 17 of 31 and upon consideration of the First Day Declaration; and this Court having jurisdiction to consider the Motion and the relief requested therein pursuant to 28 U.S.C. 157 and 1334 and the Amended Standing Order of Reference from the United States District Court for the District of Delaware, dated February 29, 2012; and this Court having found that this is a core proceeding pursuant to 28 U.S.C. 157(b)(2); and this Court having found that venue of this proceeding and the Motion in this district is proper pursuant to 28 U.S.C and 1409; and this Court having found that the Debtors notice of the Motion and opportunity for a hearing were appropriate under the circumstances and no other notice need be provided; and this Court having reviewed the Motion and having heard the statements in support of the relief requested therein at a hearing before this Court (the Hearing ); and this Court having determined that the legal and factual bases set forth in the Motion and at the Hearing establish just cause for the relief granted herein; and upon all of the proceedings had before this Court; and after due deliberation and sufficient cause appearing therefor, IT IS HEREBY ORDERED THAT 1. The Motion is granted on an interim basis, as set forth herein. 2. Subject to the procedures described below, no Utility Company may (a) alter, refuse, terminate, or discontinue utility services to, or discriminate against, the Debtors on the basis of the commencement of these chapter 11 cases or on account of outstanding prepetition invoices or (b) require additional assurance of payment, other than the Adequate Assurance Deposit, as a condition to the Debtors receiving such utility services. 3. The Debtors shall deposit the Adequate Assurance Deposit in the amount of $104, into the Adequate Assurance Account within twenty (20) days of the Petition Date, 2

21 Case BLS Doc 54-1 Filed 11/08/17 Page 18 of 31 for the purpose of providing each Utility Company adequate assurance of payment of its postpetition utility services to the Debtors. 4. The Adequate Assurance Deposit shall automatically, without further Court order, be available to the Debtors upon the effective date of any chapter 11 plan in the Debtors cases; provided, however, that there are no outstanding disputes related to postpetition payments due. 5. The following Adequate Assurance Procedures are approved on an interim basis a) If a Utility Company is not satisfied with the Proposed Adequate Assurance and seeks additional adequate assurance of payment, it must serve a written Additional Assurance Request upon (i) the Debtors c/o FTI Consulting, Inc., 2001 Ross Avenue, Suite 300, Dallas, Texas (Attn Peter Heinz) and (ii) counsel for the Debtors, Richards, Layton & Finger, P.A., One Rodney Square, 920 North King Street, Wilmington, Delaware (Attn Daniel J. DeFranceschi, Esq. and Paul N. Heath, Esq.), and the Additional Assurance Request must (i) set forth the amount and form of additional assurance of payment requested; (ii) set forth the type of Utility Services, any account numbers, and the location for which Utility Services are provided; and (iii) set forth why the Utility Company believes the Proposed Adequate Assurance is not sufficient adequate assurance of payment. b) If the Debtors determine, after consultation with the Ad Hoc Committee and with the consent of the Secured Lenders constituting Required Lenders, that the Adequate Assurance Request or any consensual agreement reached in connection therewith is reasonable, the Debtors, without further order of the Court, may enter into agreement(s) granting additional adequate assurance to the Utility Company serving such Adequate Assurance Request and, in connection with such agreement(s), provide the Utility Company with additional adequate assurance of payment, including payments on prepetition amounts owing, cash deposits, prepayments, or other forms of security. c) If the Debtors determine, after consultation with the Ad Hoc Committee, that an Adequate Assurance Request is unreasonable, then they shall, within thirty (30) days after receipt of such Adequate Assurance Request, or such longer period as may be agreed to between the Debtors and the Utility Company, file a motion (the Determination Motion ) pursuant to section 366(c)(3) of the Bankruptcy Code seeking a determination from the Court that the Proposed Adequate Assurance, plus any additional consideration offered by the Debtors, constitutes adequate assurance of payment. Pending notice and a hearing on the Determination Motion, the Utility Company that is the subject of the unresolved Adequate Assurance 3

22 Case BLS Doc 54-1 Filed 11/08/17 Page 19 of 31 Request may not alter, refuse, or discontinue Utility Services to the Debtors. 6. Any Utility Company that fails to make an Adequate Assurance Request shall be deemed to be satisfied that the Adequate Assurance Account provides adequate assurance of payment to such Utility Company within the meaning of section 366 of the Bankruptcy Code. 7. The inclusion of any entity in, as well as any omission of any entity from, the Utility Company List shall not be deemed an admission by the Debtors that such entity is, or is not, a utility within the meaning of section 366 of the Bankruptcy Code, and the Debtors reserve all rights and defenses with respect thereto. 8. The Debtors are authorized to amend the Utility Company List to the extent the Debtors terminate the services of any Utility Company, determine that an entity listed on the Utility Company List is not a utility company pursuant to section 366 of the Bankruptcy Code, or identify Additional Utility Companies. 9. Without further order of the Court, the Debtors shall increase the amount of the Adequate Assurance Deposit in the event an Additional Utility Company is added to the Utility Company List by an amount equal to two (2) weeks of Utility Services provided by such Additional Utility Company, calculated using the historical average for such payments during the past twelve (12) months. Once such Adequate Assurance Deposit is made, such Additional Utility Company shall be subject to the terms of this Interim Order, regardless of when such Additional Utility Company is added to the Utility Company List. 10. The Debtors may terminate the services of any Utility Company and are immediately authorized to reduce the Adequate Assurance Deposit by the amount held on account of such terminated Utility Company; provided, however, that there are no outstanding disputes related to postpetition payments due. The Debtors may amend the Utility Company List 4

23 Case BLS Doc 54-1 Filed 11/08/17 Page 20 of 31 to delete a Utility Company only if it has provided ten (10) days advance notice to such Utility Company, and has not received any objection from such Utility Company. If an objection is received, the Debtors shall request a hearing before this Court at the next omnibus hearing date, or such other date that the Debtors and the Utility Company may agree. 11. Nothing contained in the Motion or this Interim Order, nor any payment made pursuant to the authority granted by this Interim Order is intended to be or shall be construed as (i) an admission as to the validity of any claim against the Debtors, (ii) a waiver of any of the Debtors or any appropriate party in interest s rights to dispute the amount of, basis for, or validity of any claim against the Debtors, (iii) a waiver of any claims or causes of action which may exist against any creditor or interest holder, or (iv) an approval, assumption, adoption, or rejection of any agreement, contract, lease, program, or policy between any Debtor and any third party under section 365 of the Bankruptcy Code. Furthermore, any payment made by the Debtors pursuant to this Interim Order is not intended to be and should not be construed as an admission to the validity of any claim or a waiver of any of the Debtors rights to dispute such claim subsequently. 12. Notwithstanding entry of this Interim Order, nothing herein shall create, nor is intended to create, any rights in favor of or enhance the status of any claim held by, any party. 13. All payments authorized by this Interim Order may be made solely to the extent in compliance with the Approved Budget (as defined in the interim or final order approving the Debtors use of cash collateral (the Cash Collateral Order )) then in effect. To the extent there is any inconsistency between the terms of this Interim Order and the Cash Collateral Order, the terms of the Cash Collateral Order shall control. 5

24 Case BLS Doc 54-1 Filed 11/08/17 Page 21 of The final hearing (the Final Hearing ) on the Motion shall be held on, 2017 at.m. (prevailing Eastern Time). Any objections or responses to entry of a final order on the Motion (each, an Objection ) shall be filed on or before 400 p.m. (prevailing Eastern Time) on, 2017, and served on the following parties (a) proposed counsel for the Debtors, Richards, Layton & Finger, P.A., One Rodney Square, 920 North King Street, Wilmington, Delaware (Attn Daniel J. DeFranceschi, Esq. and Paul N. Heath, Esq.); (b) counsel to ExGen, DLA Piper LLP (US), 444 West Lake Street, Suite 900, Chicago, Illinois (Attn Richard A. Chesley, Esq. and Daniel Simon, Esq.) and 1201 North Market Street, Suite 2100, Wilmington, Delaware (Attn Kaitlin M. Edelman, Esq.); (c) the Office of the United States Trustee for the District of Delaware, J. Caleb Boggs Federal Building, 844 King St., Lockbox 35, Wilmington, Delaware 19801, (Attn Benjamin A. Hackman, Esq.); (d) counsel to the Ad Hoc Committee, Wachtell, Lipton, Rosen & Katz, 51 W. 52 nd Street, New York, New York (Attn Scott K. Charles, Esq. and Neil M. Snyder, Esq.); (e) counsel to the Secured Agent, Norton Rose Fulbright US LLP, 1301 Avenue of the Americas, New York, New York (Attn Louis R. Strubeck, Jr., Esq.); and (f) counsel to any official committee of unsecured creditors appointed in these cases. In the event that no Objections to entry of a final order on the Motion are timely received, this Court may enter such final order without need for the Final Hearing. 15. The requirements of Bankruptcy Rule 6003(b) have been satisfied. 16. The requirements of Bankruptcy Rule 6004(a) are waived. 17. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Interim Order shall be immediately effective and enforceable upon its entry. 6

25 Case BLS Doc 54-1 Filed 11/08/17 Page 22 of The Debtors are authorized to take all actions necessary to effectuate the relief granted in this Interim Order. 19. This Court shall retain jurisdiction to hear and determine all matters arising from or related to the implementation, interpretation, and/or enforcement of this Interim Order. Dated, 2017 Wilmington, Delaware UNITED STATES BANKRUPTCY JUDGE 7

26 Case BLS Doc 54-1 Filed 11/08/17 Page 23 of 31 Schedule 1 Utility Company List Utility Company Account Number(s) Address Acton Municipal Utility Lusk Branch Court District Granbury, Texas AT&T Texas PO Box 5001 Carol Stream, IL City of Fort Worth PO Box 870 Water Department Fort Worth, TX City of Wharton E. Caney Constellation NewEnergy, Inc. Direct Energy Business, LLC Progressive Waste Solutions of Texas, Inc. Republic Services of Texas United Electric Cooperative Services, Inc. Utilities & Services, City of Dallas 1-UOT0UD 1-UOT0UN 1-UOT0VV 1-UOTOX9 1-UOTOXJ 1-UOTOXT 1-VFI VM VM Wharton, TX PO Box 4640 Carol Stream, IL Liberty Avenue Pittsburgh, PA Attn Customer Relations WC of Texas, Fort Worth District PO Box Fort Worth, TX Meter XXX Republic Services #794 PO Box Phoenix, AZ PO Box 290 Stephenville, Texas Marilla Street North Dallas, Texas Description of Utility Service Average Monthly Expense Proposed Adequate Assurance Water $30.00 $15.00 Telecom $1, $ Water $6, $3, Water $ $ Electricity $127, $63, Electricity $ $ Waste/Garbage $ $ Waste/Garbage $6, $3, Electricity $47, $23, Water Sewer $14, $7, WCA Waste PO Box Dallas, Texas Post Oak Boulevard 30 th Floor Houston, TX Attn Corporate Collections Representative Waste/Garbage $1, $ Total $104,282.00

27 Case BLS Doc 54-1 Filed 11/08/17 Page 24 of 31 EXHIBIT B Proposed Final Order

28 Case BLS Doc 54-1 Filed 11/08/17 Page 25 of 31 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE x In re ExGen Texas Power, LLC, et al., 1 Debtors x Chapter 11 Case No. 17- ( ) (Jointly Administered) Re Docket Nos. & FINAL ORDER (I) APPROVING PROPOSED FORM OF ADEQUATE ASSURANCE OF PAYMENT TO UTILITY COMPANIES, (II) ESTABLISHING PROCEDURES FOR RESOLVING OBJECTIONS BY UTILITY COMPANIES, AND (III) PROHIBITING UTILITY COMPANIES FROM ALTERING, REFUSING, OR DISCONTINUING SERVICE TO, OR DISCRIMINATING AGAINST THE DEBTORS Upon the motion (the Motion ) 2 of the above-captioned debtors (the Debtors ) for entry of interim and final orders (this Final Order ), pursuant to sections 105(a) and 366 of title 11 of the United States Code (the Bankruptcy Code ), and rules 6003 and 6004 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ), (i) approving the proposed form of adequate assurance of payment to the Utility Companies, (ii) establishing procedures for resolving objections by Utility Companies, and (iii) prohibiting Utility Companies from altering, refusing, or discontinuing service to, or discriminating against the Debtors on the basis of the commencement of these chapter 11 cases, that a debt owed by the Debtors for prepetition Utility Services was not paid when due, or on account of any perceived inadequacy of the Debtors proposed adequate assurance, all as further described in the Motion; and upon consideration of 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, are ExGen Texas Power, LLC (4129), ExGen Texas Power Holdings, LLC (2209), Wolf Hollow I Power, LLC (6945), Colorado Bend I Power, LLC (9083), Handley Power, LLC (4091), Mountain Creek Power, LLC (6288), and LaPorte Power, LLC (5101). The mailing address of each of the Debtors, solely for purposes of notices and communications, is 1310 Point Street, Baltimore, MD Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Motion.

29 Case BLS Doc 54-1 Filed 11/08/17 Page 26 of 31 the First Day Declaration; and this Court having jurisdiction to consider the Motion and the relief requested therein pursuant to 28 U.S.C. 157 and 1334 and the Amended Standing Order of Reference from the United States District Court for the District of Delaware, dated February 29, 2012; and this Court having found that this is a core proceeding pursuant to 28 U.S.C. 157(b)(2); and this Court having found that venue of this proceeding and the Motion in this district is proper pursuant to 28 U.S.C and 1409; and this Court having found that the Debtors notice of the Motion and opportunity for a hearing were appropriate under the circumstances and no other notice need be provided; and this Court having reviewed the Motion and having heard the statements in support of the relief requested therein at a hearing before this Court (the Hearing ); and this Court having determined that the legal and factual bases set forth in the Motion and at the Hearing establish just cause for the relief granted herein; and upon all of the proceedings had before this Court; and after due deliberation and sufficient cause appearing therefor, IT IS HEREBY ORDERED THAT 1. The Motion is granted on a final basis, as set forth herein. 2. Subject to the procedures described below, no Utility Company may (a) alter, refuse, terminate, or discontinue utility services to, or discriminate against, the Debtors on the basis of the commencement of these chapter 11 cases or on account of outstanding prepetition invoices or (b) require additional assurance of payment, other than the Adequate Assurance Deposit, as a condition to the Debtors receiving such utility services. 3. The Adequate Assurance Deposit is hereby deemed adequate assurance of future payment of utility services with respect to each of the Utility Companies listed on Exhibit 1 hereto. 2

30 Case BLS Doc 54-1 Filed 11/08/17 Page 27 of The Adequate Assurance Deposit shall automatically, without further Court order, be available to the Debtors upon the effective date of any chapter 11 plan in the Debtors cases; provided, however, that there are no outstanding disputes related to postpetition payments due. 5. The following Adequate Assurance Procedures are approved on a final basis a) If a Utility Company is not satisfied with the Proposed Adequate Assurance and seeks additional adequate assurance of payment, it must serve a written Additional Assurance Request upon (i) the Debtors c/o FTI Consulting, Inc., 2001 Ross Avenue, Suite 300, Dallas, Texas (Attn Peter Heinz) and (ii) counsel for the Debtors, Richards, Layton & Finger, P.A., One Rodney Square, 920 North King Street, Wilmington, Delaware (Attn Daniel J. DeFranceschi, Esq. and Paul N. Heath, Esq.), and the Additional Assurance Request must (i) set forth the amount and form of additional assurance of payment requested; (ii) set forth the type of Utility Services, any account numbers, and the location for which Utility Services are provided; and (iii) set forth why the Utility Company believes the Proposed Adequate Assurance is not sufficient adequate assurance of payment. b) If the Debtors determine, after consultation with the Ad Hoc Committee and with the consent of the Secured Lenders constituting Required Lenders, that the Adequate Assurance Request or any consensual agreement reached in connection therewith is reasonable, the Debtors, without further order of the Court, may enter into agreement(s) granting additional adequate assurance to the Utility Company serving such Adequate Assurance Request and, in connection with such agreement(s), provide the Utility Company with additional adequate assurance of payment, including payments on prepetition amounts owing, cash deposits, prepayments, or other forms of security. c) If the Debtors determine, after consultation with the Ad Hoc Committee, that an Adequate Assurance Request is unreasonable, then they shall, within thirty (30) days after receipt of such Adequate Assurance Request, or such longer period as may be agreed to between the Debtors and the Utility Company, file a motion (the Determination Motion ) pursuant to section 366(c)(3) of the Bankruptcy Code seeking a determination from the Court that the Proposed Adequate Assurance, plus any additional consideration offered by the Debtors, constitutes adequate assurance of payment. Pending notice and a hearing on the Determination Motion, the Utility Company that is the subject of the unresolved Adequate Assurance Request may not alter, refuse, or discontinue Utility Services to the Debtors. 3