The largest and oldest energy cooperative in Texas is filing for Chapter 11 bankruptcy protection, citing itThat left millions of state residents without electricity.
Brazos Electric Power Cooperative, which serves 16 distribution member cooperatives catering to the needs of more than 1.5 million Texans, said Monday that it raised $ 2.1 billion in bills during the severe cold that struck Texas between February 13-19.
LikeSnow and ice will flog the state during Valentine’s weekend, most of Texas , Followed by water systems. Tens of millions crowded into freezing homes that slowly cooled or fled in search of safety. With gas-fired power plants shutting down, wells freezing, nuclear power plant shutting down and wind turbines frozen, the country suffered from severe electricity shortages, and wholesale electricity prices soared to $ 9,000 per megawatt-hour.
The higher prices, which were supposed to act as an incentive for energy producers to generate electricity, failed to lead to an increase in available capacity, as much of the country’s production capacity was frozen.
Before the freeze, Brazos was “financially strong and stable with a clear vision for its future and a strong credit rating from” A “to” A + “, which is higher than most electric companies. Press release Monday.
That came a bill of $ 2.1 billion
Brazos said it received “very high bills” from the Texas Electrical Reliability Board for warranties and an alleged cost for electrical service. Bills totaling $ 2.1 billion were required to be paid within days. This is because, as a cooperative, Brazos’ costs are passed on to its members and the retail consumers that its members serve.
The cooperative said, “Brazos” decided that it “cannot and will not impose this catastrophic financial event on its members and these consumers.”
“Let me emphasize that this action by Brazos Electric was necessary to protect its member cooperatives and its over 1.5 million retail members from unaffordable electricity bills as we continue to provide electrical service throughout the court-supervised process,” said Clifton Carney. Brazos Executive Vice President and General Manager, in a statement.
Brazos’ first bankruptcy filing is likely among the many requests arising from the winter storm, according to energy analysts. Most Texans rely on flat rate plans, according to the state’s Public Utilities Commission, in which a customer pays a predetermined amount for each portion of the electricity they use. This leaves the retailer vulnerable to fluctuations in wholesale energy prices.
“It’s possible that we’ll see a whole bunch of electricity providers go out of business, especially those who are offering fixed-rate plans to people,” Joshua Rhodes, a research associate at the University of Texas at Austin, told CBS News. “If you’re selling it for 10 cents a kilowatt-hour and paying $ 9 a kilowatt-hour, it doesn’t take long to mess up your balance sheet.”
Just Energy said it could stop operating after losing up to $ 250 million in a blackout. According to CBS 11 In Dallas.
Griddy Electric Company has filed a lawsuit – again
Brazos’ bankruptcy comes as Texas Attorney General Ken Paxton says he is suingTo pass huge bills to its customers during the February winter storm. The lawsuit accuses Griddy of violating Texas’ Deceptive Business Practices Act and is seeking to recover funds for clients.
Griddy charges $ 10 a month to give people a way to pay wholesale prices for electricity rather than a flat rate. But when temperatures dropped below zero last month,Griddy customers received hefty electricity bills. The retailer is facing at least one class action lawsuit from A. .
ERCOT transferred about 10,000 Griddy customers to other facilities Friday. Grady said that ERCOT “took our members and effectively shut down Griddy.”
“We have always been transparent and focused on customers every step of the way. We wanted to keep fighting for our members to get comfortable and that hasn’t changed,” said Grady.
Last week, Denton File a lawsuit against ERCOT More than $ 207 million in electricity bills the company incurred during the blackout.
Irina Ivanova from CBS News contributed to this report.