Texas Energy Co-Op files for bankruptcy after storm and high bill: NPR
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Texas’ largest electricity co-op filed for bankruptcy on Monday, citing a massive bill from the state’s electricity grid operator in the wake of last month’s winter storm that left millions in ‘inhabitants without electricity for days.
Brazos Electric Power Cooperative has filed a Chapter 11 claim with the US South District Bankruptcy Court, according to court documents reviewed by NPR.
In court documents, the company said it received a largely unpaid bill of $ 1.8 billion from the Electric Reliability Council of Texas, the entity that maintains and operates much of the state’s electricity grid.
Brazos Electric is the wholesale energy supplier for its 16-member cooperative.
Taxpayers and politicians criticized ERCOT management for not preparing for the storm. In the days following the record high temperatures, customers reported sky-high electricity bills. The organization is under investigation by the counties of Texas and the Federal Energy Regulatory Commission.
Dozens of other energy providers face huge charges for electricity and other charges during the February winter storm in Texas. Many others may also face bills that amount to billions of dollars in fees.
The result of “catastrophic failures”
Brazos said in court documents that the company was in good financial health before the cold storm in late February. At the start of February, the idea that the company would end the month preparing for bankruptcy was “unfathomable.”
“Yet that has changed as a direct result of the catastrophic failures that accompanied the winter storm that blanketed the state of Texas on or around February 13, 2021 and maintained its grip on historically below freezing temperatures for days on end. “the company said. “Power generation equipment and pipeline equipment have been reported to have frozen, causing the production available within ERCOT to drop dramatically. “
This storm, at its peak, left more than 4 million people in dark, freezing cold for days.
The wholesale price of electricity has been set at a maximum price of $ 9,000 per megawatt hour for more than four consecutive days. ERCOT also imposed other incidental charges totaling over $ 25,000 per megawatt hour
Brazos said in his court file: “The consequences of these prices have been devastating. “
The company received invoices for the seven-day winter storm from ERCOT “which, when combined, amounted to more than $ 2.1 billion, payment of which was required within days,” according to documents from the court.
Brazos recovers its costs from its members, who collect them from consumers. The company said in its file that to protect itself, its member co-ops and consumers from a massive bill, it filed for bankruptcy.
He said: “Brazos Electric will not impose this catastrophic ‘black swan’ financial event on its members and their consumers, and started this bankruptcy to maintain the stability and integrity of its entire cooperative electric system. . “
The company lists its assets and liabilities between $ 1 billion and $ 10 billion.
ERCOT did not immediately respond to a request for comment.