https://www.reuters.com/article/idUSKCN2AT1FE?il=0Texas power cooperative files for bankruptcy, citing $1.8 billion grid debt
HOUSTON (Reuters) - The largest and oldest electric power cooperative in Texas filed for bankruptcy protection in Houston on Monday, citing a disputed $1.8 billion debt to the state’s grid operator.
Brazos Electric Power Cooperative Inc, which supplies electricity to more than 660,000 consumers across the state, is one of dozens of providers facing enormous charges stemming from a severe cold snap last month. The fallout threatens utilities and power marketers, which collectively face billions of dollars in blackout-related charges, executives said.
Unusually frigid temperatures knocked out nearly half of the state’s power plants in mid-February, leaving 4.3 million people without heat or light for days and bursting water pipes that damaged homes and businesses.
Brazos and others that committed to provide power to the grid - and could not - were required to buy replacement power at high rates and cover other firms’ unpaid fees.
The grid operator, the Electric Reliability Council of Texas (ERCOT), on Monday said that $2.46 billion in bills went unpaid, underscoring the financial stress on utilities and power marketers. ERCOT acts in part as a clearinghouse, collecting from power buyers and paying those who provide the electrons.
ERCOT triggered the squeeze when it pushed up spot-market rates to $9,000 per megawatt hour (mwh) over more than four days and levied huge fees for services. The service fees were 500 times the usual rate, industry executives said.
Brazos executive Clifton Karnei, who sat on grid operator ERCOT’s board of directors until last week, told the federal court that Brazos “finds itself caught in a liquidity trap that it cannot solve with its current balance sheet”.
Brazos said ERCOT’s $2.1 billion invoice was nearly three times the cooperative’s power costs for all of 2020. Brazos responded by issuing a notice of force majeure, rejecting the bills, Karnei’s statement said.
In other news:
https://apnews.com/article/texas-ag-sue ... 03c9608d83AG sues Texas utility over customers’ sky-high energy bills
AUSTIN, Texas (AP) — Texas’ attorney general said Monday he’s suing electricity provider Griddy for passing along massive bills to its customers during last month’s winter storm.
The lawsuit comes days after Texas’ power grid manager effectively shut down Griddy by revoking its access to the state’s electricity market.
Griddy charges $10 a month to give people a way to pay wholesale prices for electricity instead of a fixed rate. But when temperatures plummeted well below freezing last month, wholesale prices spiked and Griddy customers were left with sky-high electricity bills.
“Griddy misled Texans and signed them up for services which, in a time of crisis, resulted in individual Texans each losing thousands of dollars,” Attorney General Ken Paxton said in a statement. “As Texans struggled to survive this winter storm, Griddy made the suffering even worse as it debited outrageous amounts each day.”
The lawsuit accused Griddy of violating the Texas Deceptive Trade Practices Act and seeks refunds for customers. The unusually heavy winter storm blanketed much of Texas with snow, knocking out electricity to 4 million customers and leaving many struggling to find clean water.
Meanwhile, the Electric Reliability Council of Texas, or ERCOT, shifted about 10,000 Griddy customers to other utilities on Friday.
Griddy said in a statement that ERCOT “took our members and have effectively shut down Griddy.”