Texas electricity firm files for bankruptcy citing $1.8 billion in claims from grid operator

[dalton99a]

Last edited Mon Mar 1, 2021, 12:32 PM - Edit history (4)

Source: Reuters

HOUSTON (Reuters) - Texas’s largest and oldest electric power cooperative on Monday filed for bankruptcy protection in federal court in Houston, citing a disputed $1.8 billion bill from 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 state’s grid operator, Electric Reliability Council of Texas (ERCOT), on Friday said $2.1 billion in initial bills went unpaid, underscoring the financial stress on utilities and power marketers. More providers likely will reject the bills in coming days, executives said.


Read more: https://www.reuters.com/article/us-bankruptcy-brazoselectric-texas-outag/texas-electricity-firm-files-for-bankruptcy-citing-1-8-billion-in-claims-from-grid-operator-idUSKCN2AT1FE

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http://www.brazoselectric.com/pressrelease.pdf

[winstars]

1. Oh, I suppose its because of the Green New Deal this has occurred????????????

Darn windmills.

[NNadir]

10. An inconvenient truth is that this situation is...

..."smart" metering run wild.

[abqtommy]

2. Some Texans remember The Alamo; ERCOT remembers ENRON...

[IthinkThereforeIAM]

3. Let the state of Texas take out a loan from the Feds, like GM, Chrysler and Ford did in 2008/09...

... and give Texas 10 years to pay it off. They caused their own problem. They had many warnings the past few decades... the rest of the nation can show how charitable they are by loaning them money when in dire straights. (don't know if I should put in a sarcasm tag or not).

[ancianita]

6. +1

[MissMillie]

15. I like this idea (n/t)

.

[hot2na]

4. Looks like ERCOT will need a bailout from taxpayers

So much for all that non regulation bloviating.

[aggiesal]

26. Privatize the profits, socialize the debts ...

I think when any company asks for bailouts from us taxpayers,
then the government should mandate the business model change,
so that we should not be bailing them out every other year.

It is, after all, our money they're using to stay alive.

[bucolic_frolic]

5. Sounds to me like free market bidding at a point of scarcity

but I'm no expert on Texas utility structure. Deregulation and price-gouging come to mind. Ah, the benefits of laissez-faire no-government capitalism! Get the government off your backs and THIS is what happens!

[Maxheader]

7. Fix your shit texas..

We've already got armadillos migrating up here cuz of global

warming. Don't need any lone star wingers lookin for stable

power ...

[Baitball Blogger]

8. Bankruptcy. Who knew?

[FailureToCommunicate]

9. So, Big Texas power providers get a taste of having to pay "out of network" charges. Lesson...

learned? Probably not.

Why do I get the feeling we the tax payers will end up being asked to bail the power providers -like Brazos - who had to buy power from elsewhere, AND bail out the millions of Texan homeowners who also got exorbitant bills for that week.

[Lonestarblue]

12. In return for a federal bailout, Texas must join a federal power grid and be subject to regulation.

This seems only fair. Otherwise, it will just happen again because Republican politicians here are too stupid, greedy, and corrupt to look out for average citizens.

[FailureToCommunicate]

16. That would be a good requirement. But that may also mean "we" are on the hook for them to up-

grade, and winterize the power plants and grid.

[Lonestarblue]

23. We're likely to be on the hook anyway because Republicans are not trustworthy.

They’ll take the federal bailout, give consumers a few dollars, and reward their buddies in the energy industry with the rest of the money.

[Roc2020]

11. No man...or State is an Island

because when the do do hits the fan and it always does, you're on your own

[IronLionZion]

13. Those damn liberals are killing jobs again with their regulations

Oh wait, Texas is deregulated and independent

What a hot mess. This has to be a campaign issue to change the leadership of that state. If people can't get basic services like power, heat, water, or clear roads, it looks like it's time for a change.

[MissMillie]

14. the big, rich muckety-mucks want a bail-out..what else is new? (n/t)

.

[turbinetree]

17. Well that didn't take long....who would have thunk....

.....greed is not good, and this just shows what and how "corporate run state" fails in it's mission, I mean that literally, and then they will go to the horse trough and ask for a bailout at both the state and federal level from "blue state taxpayers...........and Allen West and his gang want to leave the union...........

[rpannier]

18. This is something sensible people need to mention as often as possible

The failure of deregulation

[NBachers]

19. How's that Corporate Stampede out of California and into Free Range Texas workin' out for ya,

Hewlett Packard, Oracle, and Tesla?

[LaMouffette]

20. So Texas energy customers are having their savings wiped out by $17,000 electric bills, but

the giant energy company that has screwed them over gets to go bankrupt?!

I think every person who received an exorbitant electric bill after the Texas snowstorm event should file for bankruptcy then. All of them, do one massive bankruptcy all at once.

[modrepub]

21. Another "Too Big To Fail" Moment

Think a lot of people are confusing a functioning market place with what's going on in TX, which is more of a political set up than a "deregulated" market.

In a truly functioning market, situations like this will tend to wring out the bad players and hopefully replace them with competent ones. What happened here was residents and companies didn't lock in contracts (or hedge their position) because the spot price was lower. What you saved over the years by buying based on the lowest price (spot price) just got wiped out in a week. The supply was interrupted and could not meet demand (plus you couldn't pull electricity from neighboring grids because politicians didn't want to be subject to federal/cross-state commerce rules). A veritable (man-made) black swan event.

If taxpayers step in to "correct" this problem then it doesn't allow the market to function properly by removing the players who are responsible for this catastrophic mistake. Hopefully ratepayers will get some relief but if they don't learn to buy via contract instead of spot then this is going to happen again (and again).

There needs to be some market-based accountability or this will continue. Taxpayers will be saddled with more debt and the politicians and grid managers will not suffer any real consequences for their actions (and the total lack of understanding how true markets actually work).

[LeftInTX]

22. This is not good. This is a public utility. I was afraid of this.

Now customers will be forced into the private market.

[Yo_Mama_Been_Loggin]

24. Welcome to Trumponomics

When the shit hits the fan file bankruptcy and walk away.

[mdbl]

25. Guess TX has no anti-gouging laws for states of emergemcy

the guy hoarding the hand sanitizer to sell back at outrageous prices gets arrested for gougomg but the power grid operator in TX has no problem doing it.

[dalton99a]

27. Heck, the Texas Public Utility Commission ORDERED them to raise prices

[mdbl]

28. It is totally moronic for them to think this is a normal economic condition

The market fluctuations are normally not so severe and any dolt that isn't a greedy asshole should know the market should not be guiding pricing in an emergency situation such as what happened in TX. Even the stock market halts trading before things completely crap out. It was a man-made emergency. Hopefully the voters will remember to remove the dumbasses who were supposed to be responsible for the grid's oversight. I know, that's a pipe dream in TX.

[dalton99a]

29. The chief moron resigned:

DeAnn Walker, the chairwoman of the Public Utility Commission, is the highest-ranking official to step down in the aftermath of one of the largest power failures in U.S. history.

Gov. Greg Abbott appointed Walker to the commission in 2017, and she is one of two commissioners who used to work in his office. In a letter to Abbott, Walker said she accepted her role in the outages but that others should acknowledge their responsibility, including gas companies and lawmakers.

Abbott, a Republican, blamed the power failures on the state’s grid manager, the Electric Reliability Council of Texas, commonly known as ERCOT. But the three-member commission appointed by Abbott has oversight authority over ERCOT.

Walker struggled in two lengthy appearances before legislative panels investigating the state’s electric grid breakdowns, the commission’s response and the lack of communication with the public over the approaching storm.

She initially said her agency has little control over ERCOT, but later said it has total control. Lawmakers questioned her knowledge of her agency’s authority and the decision to reduce or reassign enforcement staff charged with policing the utility companies.

She was also criticized for a lack of communication about the approaching catastrophic storm. Walker testified that she spoke with Abbott’s office, as well as staff for Lt. Gov. Dan Patrick and others several days before the storm hit to warn them about the weather and its potential impact on power distribution in the state.

https://www.cnbc.com/2021/03/01/texas-fallout-over-blackouts.html

[mdbl]

30. Thanks for the info

It makes you wonder why a state like TX has a PUC when they don't want any regulation. A job with a bunch of seats being paid to do nothing.