Jim Millstein, the U.S. Treasury Department’s former chief restructuring officer, and his firm Millstein & Co. have been retained by senior creditors to Energy Future Holdings Corp.’s competitive power unit, a person with knowledge of the matter said.

Millstein will act on behalf of first-lien lenders to Texas Competitive Electric Holdings, said the person, who asked not to be identified because the process isn’t public. The senior lender group includes Franklin Resources Inc. (BEN), Apollo Global Management LLC (APO), Oaktree Capital Group LLC (OAK) and GSO Capital Partners, other people familiar with the matter said earlier this month. Moody’s Investors Service said in a note yesterday that it expected the company to restructure in six to 12 months.

Energy Future, formerly known as TXU Corp., was taken private by KKR & Co. (KKR), TPG Capital and Goldman Sachs Capital Partners for $48 billion in the biggest leveraged buyout in history. KKR and TPG hired Blackstone Group LP (BX), GSO Capital’s parent, to help restructure Energy Future’s debt load, while Energy Future has retained Evercore Partners Inc. (EVR) and Kirkland & Ellis, other people familiar with the discussions said earlier this month. Energy Future had $37.8 billion of long-term debt as of Dec. 31, according to Securities and Exchange Commission filings.

The company’s regulated utility Oncor had $5.4 billion in long-term debt as of Dec. 31, according to SEC filings. The unit enlisted the New York-based restructuring firm Miller Buckfire & Co., a unit of Stifel Financial Corp., people familiar with those discussions have said.

Representatives of Energy Future and Millstein & Co. declined to comment on the firm’s retention.

Gas Prices

Energy Future’s competitive unit may run out of cash in early 2014 after a plunge in natural gas prices that lowered power rates in Texas, Moody’s said yesterday in its research note. Texas Competitive faces an October 2014 repayment deadline for loans of $3.8 billion.

Millstein’s hiring by creditors was reported earlier by the Financial Times.

At Treasury, Millstein oversaw American International Group Inc. (AIG)’s restructuring. He was formerly co-head of corporate restructuring at Lazard Freres & Co., and earlier led corporate restructuring at the law firm Cleary Gottlieb Steen & Hamilton LLP.

To contact the reporters on this story: Beth Jinks in New York at bjinks1@bloomberg.net; Mark Chediak in San Francisco at mchediak@bloomberg.net

To contact the editors responsible for this story: Jeffrey McCracken at jmccracken3@bloomberg.net; Susan Warren at susanwarren@bloomberg.net