Houston: Texas’s largest electrical cooperative has filed for bankruptcy protection after receiving a $ 2.1 billion bill from the state’s grid operator in the wake of last month’s winter storm that left millions without power.
The bitter cold weather in mid-February left millions without power across Texas as Arctic conditions overwhelmed local utility companies unprepared for such weather.
The Brazos Electric Power Cooperative, which supplies 16 cooperative members serving more than 1.5 million Texans, said it filed for Chapter 11 bankruptcy on Monday after receiving “very high bills” from the Electricity Reliability Board of a grid operator in Texas (Ercot).
According to court files, Brazos said he received bills from Ercott totaling more than $ 2.1 billion, with payment required within days.
Brazos said the bill for the seven-day “Black Swan” winter event was nearly three times the total energy cost of $ 774 million for the full year of 2020.
“As early as February 2021, the notion that a financially stable co-operative like Brazos Electric would end the month in preparation for bankruptcy was incomprehensible,” said executive vice president and general manager Clifton Carney in a lawsuit.
During the storm, he said, the wholesale electricity price was set at a maximum price of $ 9,000 per megawatt hour for more than four consecutive days and Ercot had imposed another additional fee totaling more than $ 25,000 per megawatt hour.
“The consequences of these prices were devastating.”
Ercot has come under heavy criticism from customers and politicians for its apparent failure to prepare for cold weather and high bills due to a temporary skyrocketing energy market.
Residential customers who sign variable rate plans have reported receiving electric bills of up to $ 16,000.
Brazos said it has filed for bankruptcy protection because it “cannot and will not impose this catastrophic financial event on its members and these consumers.”
“Let me stress that this measure by Brazos Electric was necessary to protect its member cooperatives and its more than 1.5 million retail members from unaffordable electricity bills,” Carney said in a press release.
Texas is the only state in the continental United States that has its own independent power grid, which means it was cut off when the weather arrived.
Gov. Greg Abbott has ordered an investigation into the Ercott case, and the Federal Energy Regulatory Commission also said it will investigate the factors behind the power outages.