• February 5, 2023

Texas Energy Co-Op Files For Bankruptcy After Storm, High Bill : NPR

Millions of Texans lost their electricity when the winter storm hit the state and shut down coal, natural gas and nuclear power plants that were unprepared for freezing temperatures. Brazos Electric Power Cooperative Inc. filed Chapter 11 in the US Bankruptcy Court, citing a massive, multi-billion dollar bill from the Texas Electric Reliability Council. Justin Sullivan / Getty Images Hide caption

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Justin Sullivan / Getty Images

Millions of Texans lost their electricity when the winter storm hit the state and shut down coal, natural gas and nuclear power plants that were unprepared for freezing temperatures. Brazos Electric Power Cooperative Inc. filed Chapter 11 in the US Bankruptcy Court, citing a massive, multi-billion dollar bill from the Texas Electric Reliability Council.

Justin Sullivan / Getty Images

The largest energy cooperative in Texas filed for bankruptcy on Monday, citing a massive bill from the state power grid operator after last month’s winter storm that left millions of residents without electricity for days.

Brazos Electric Power Cooperative Inc. has filed Chapter 11 in the United States Bankruptcy Court for the Southern District of Texas, based on court documents reviewed by NPR.

The company has stated in court documents that it received an essentially non-payable bill of $ 1.8 billion from the Texas Electric Reliability Council, the company that maintains and operates much of the state’s electrical system.

Brazos Electric is the energy wholesaler for its 16-member cooperative.

Interest payers and politicians have criticized the ERCOT leadership for not preparing for the storm. In the days immediately following the record low temperatures, customers reported exorbitantly high electricity bills. The organization is being studied by the counties of Texas and the United States Federal Energy Regulation Commission.

Dozens of other utility companies had to pay huge charges for electricity and other charges during the unusual February winter storm in Texas. Many others may also face billions of billions of dollars in fees.

The result of “catastrophic failures”

Brazos said in court documents that the company was in solid financial shape until the cold storm in late February. As February started, the idea that the company would end its bankruptcy preparation month was “unfathomable”.

“That changed, however, as a direct result of the catastrophic outages that accompanied the winter storm that covered the state of Texas on or about February 13, 2021, holding historically below freezing temperatures for days,” the company said. “It has been reported that power plants and natural gas pipeline facilities have frozen, causing a dramatic decrease in available generation within ERCOT.”

In the worst case, this storm left more than 4 million people in the dark and bitter cold for days.

The wholesale electricity price has been set at the maximum price of $ 9,000 per megawatt hour for more than four consecutive days. ERCOT also imposed other ancillary fees in excess of USD 25,000 per megawatt hour

Brazos said in his court record: “The consequences of these prices have been devastating.”

The company received invoices from ERCOT for the seven-day winter storm event, “which together totaled more than 2.1 billion US dollars and had to be paid within a few days,” the court records say.

Brazos reimburses its costs from its members who move in from consumers. The company said in its filing that it filed for bankruptcy to protect itself, its member cooperatives and consumers from a massive bill.

It said, “Brazos Electric will not force this disastrous Black Swan financial event on its members and their consumers and has initiated this bankruptcy in order to maintain the stability and integrity of its overall electrical cooperative system.”

The company lists its assets and liabilities between $ 1 billion and $ 10 billion.

ERCOT did not immediately respond to a request for comment.

Jack

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