Texas electricity firm files for bankruptcy citing $1.8 billion in claims from grid operator
Last edited Mon Mar 1, 2021, 12:32 PM - Edit history (4)
Source: Reuters
HOUSTON (Reuters) - Texass 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 states 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 states 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 states 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
http://www.brazoselectric.com/pressrelease.pdf
winstars
(4,220 posts)Darn windmills.
NNadir
(33,516 posts)..."smart" metering run wild.
abqtommy
(14,118 posts)IthinkThereforeIAM
(3,076 posts)... 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
(36,053 posts)MissMillie
(38,555 posts).
hot2na
(357 posts)So much for all that non regulation bloviating.
aggiesal
(8,914 posts)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
(43,147 posts)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
(4,373 posts)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
(46,703 posts)FailureToCommunicate
(14,013 posts)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
(9,982 posts)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
(14,013 posts)grade, and winterize the power plants and grid.
Lonestarblue
(9,982 posts)Theyll take the federal bailout, give consumers a few dollars, and reward their buddies in the energy industry with the rest of the money.
Roc2020
(1,615 posts)because when the do do hits the fan and it always does, you're on your own
IronLionZion
(45,433 posts)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
(38,555 posts).
turbinetree
(24,695 posts).....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
(24,329 posts)The failure of deregulation
NBachers
(17,108 posts)Hewlett Packard, Oracle, and Tesla?
LaMouffette
(2,030 posts)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
(3,495 posts)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
(25,305 posts)Now customers will be forced into the private market.
Yo_Mama_Been_Loggin
(107,956 posts)When the shit hits the fan file bankruptcy and walk away.
mdbl
(4,973 posts)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
(81,475 posts)mdbl
(4,973 posts)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
(81,475 posts)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 states 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 states electric grid breakdowns, the commissions 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 agencys 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 Abbotts 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
(4,973 posts)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.