Texas electricity retailer Griddy files for Chapter 11 bankruptcy
(Reuters) – Electricity retailer Griddy Energy LLC on Monday became the third Texas electricity company to file for Chapter 11 bankruptcy for huge electricity bills during last month’s deep freeze.
Frigid temperatures destroyed nearly half of the state’s power plants in a cold snap that killed at least 56 people and disrupted its electricity market. Electricity prices have increased about 400 times as demand skyrocketed and generators went offline.
Griddy owes Texas grid operator Electric Reliability Council of Texas (ERCOT) $ 29 million for the electricity, according to his filing with the US bankruptcy court in Houston. The file lists debts of up to $ 50 million and assets of less than $ 10 million.
Among its major creditors, Griddy owes transmission line operators CenterPoint Energy and Oncor Electric Delivery Co about $ 1.2 million each, and electronic payment company Stripe Inc over $ 1 million.
Last month, ERCOT revoked Griddy’s access to the state grid for overdue bills and shifted its customers to other utilities. Two other electricity distributors, Entrust Energy Inc and Power of Texas Holdings, also had their access revoked and customers transferred by ERCOT for non-payment.
On Friday, ERCOT said network users who missed payment deadlines owed it more than $ 3 billion. Unpaid bills are reallocated to the remaining network users, threatening a cascade of bankruptcies, officials said.
The ERCOT bills prompted Just Energy Group Inc and Brazos Electric Power Cooperative Inc to seek bankruptcy protection. Brazos owned ERCOT for $ 1.8 billion.
Griddy said he was seeking court permission to release his former clients from their unpaid bills, accusing ERCOT of its financial woes.
“The actions of ERCOT have destroyed our business and caused financial harm to our customers,” Griddy CEO Michael Fallquist said in a statement.
ERCOT raised electricity prices to $ 9,000 per megawatt hour (MWh) and held them there for five days in hopes of inducing more production and combating widespread blackouts. The $ 9,000 per MWh compares to an average price of $ 22 per MWh in 2020.
Texas lawmakers and the state market advisor said the last 32 hours of this pricing and some charges were errors that should be corrected. On Monday, state senators passed a bill ordering the ERCOT and the Utilities Commission to cut fees by about $ 5.1 billion.
Reporting by Shariq Khan and Arundhati Sarkar in Bengaluru; Gary McWilliams additional reports; Editing by Marguerita Choy and Shinjini Ganguli