March 1, 2021 ☼ texas ☼ power-failure ☼ deregulation
Source: NPR - Link
The largest power cooperative in Texas filed for bankruptcy protection Monday, citing a massive bill from the state’s electricity grid operator following last month’s winter storm that left millions of residents without power for days.
Brazos Electric Power Cooperative filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas, according to court documents reviewed by NPR.
The company in court documents says it received an essentially unpayable $1.8 billion bill from the Electric Reliability Council of Texas, the entity that maintains and operates much of the state’s electricity grid.
The company received invoices for the seven day winter storm event by ERCOT “which, when combined, amounted to over $2.1 billion, payment of which was required within days,” the court filings say.
Brazos recovers its costs from its members, which collect from consumers. The company said in its filing that to protect itself, its member cooperatives, and consumers from a massive bill, it filed for bankruptcy.
It said, “Brazos Electric will not foist this catastrophic ‘black swan’ financial event onto its members and their consumers, and commenced this bankruptcy to maintain the stability and integrity of its entire electric cooperative system.”
My guess is that they’ll work out a discounted payment plan that will work over time. ERCOT is not known for tolerating this kind of move. I expect more of the regional cooperatives to do this kind of thing.