WACO, Texas (KBTX) – Brazos Electric Power Cooperative has filed for bankruptcy in federal court in Houston, citing assets and liabilities between $ 1 billion and $ 10 billion. Monday’s presentation begins a financial restructuring process for the cooperative.
Brazos Electric is the wholesale energy provider for its 16 member-owner distribution cooperatives and a municipal system, which includes the Mid-South Synergy of Brazos Valley: Navasota and Navasota Valley Electric Franklin. See the full list of members here.
Brazos Electric cites the severe winter storms as the impetus for the presentation: “Before the severe cold weather… Brazos Electric was in all respects a stable and financially sound company… As a result of the catastrophic failures due to the storm, Brazos Electric was introduced with excessively high bills from ERCOT for warranty and for the alleged cost of electric service, the payment of which was required in a few days. “The press release goes on to state that it” cannot and will not impose this catastrophic financial event “on consumers of Energy.
The full press release is below.
Brazos Electric Power Cooperative, Inc. files for Chapter 11 financial restructuring
Brazos Electric acts to protect its member cooperatives and retail members from unaffordable electricity bills
WACO, TEXAS, MARCH 1, 2021 – Brazos Electric Power Cooperative, Inc. (“Brazos Electric” or “the Company”), a leading and oldest and largest power generation and transmission cooperative in Texas serving 16 member distribution cooperatives serving more than 1.5 million Texans announced today that they have filed a voluntary petition for relief under Chapter 11 of the US Bankruptcy Code in the US Bankruptcy Court for the Southern District of Texas.
Brazos Electric initiated this financial restructuring to maintain the stability and integrity of its entire cooperative electrical system. Before the severe cold weather that blanketed Texas with freezing temperatures February 13-19, Brazos Electric was in every respect a stable and financially sound company with a clear vision for its future and a strong credit rating of “A” to ” A + “. As a result of the catastrophic failures due to the storm, ERCOT presented Brazos Electric with excessively high bills for the warranty and the alleged cost of the electric service, the payment of which was required within days. As a cooperative whose costs are passed on to its members, and ultimately borne by the Texas retail consumers served by its member cooperatives, Brazos Electric determined that it cannot and will not impose this catastrophic financial event on its members and those consumers.
Throughout the next financial restructuring process, Brazos Electric will remain committed to the following:
• Provide affordable and reliable electric service to its member cooperatives and their retail members;
• Assist our member cooperatives, their retail members, and their communities affected by the historic extreme cold weather event on February 13-19, 2021 in the rebuilding effort;
• Support the orderly, fair and prompt treatment and satisfaction of their responsibilities derived from the extreme cold weather event that severely affected the state of Texas from February 13 to 19, 2021.
“Let me emphasize that this action by Brazos Electric was necessary to protect its member cooperatives and its more than 1.5 million retail members from unaffordable electric bills as we continue to provide electric service throughout the court-supervised process,” said Clifton Karnei, vice president Executive President and General Manager of Brazos Electric. “We will prioritize what is most important to our member cooperatives and their retail members as we and they work to get back to normal. We hope that this court-supervised process will provide us with the protections and mechanism to protect and preserve our assets and operations, and satisfy our obligations to our creditors. ”
The filing also includes several customary “day one” operational motions that Brazos Electric filed with the court in support of its financial restructuring, including requests for authorizations to continue paying salaries and benefits for employees and certain critical suppliers. Brazos Electric will pay all obligations under normal business terms for goods and services provided on the filing date of March 1, 2021 and thereafter.
For additional information on the Brazos Electric reorganization, including access to court files and other documents related to the court-supervised process, visit https://cases.stretto.com/Brazos or call 855.529.1663 (toll free ) or 949,771. 2210 (international) or email [email protected]
Norton Rose Fulbright is serving as Senior Restructuring Advisor and Berkeley Research Group is serving as Financial Advisor to Brazos Electric.
About the Cooperativa de Energía Eléctrica Brazos
Brazos Electric Power Cooperative, Inc. (“Brazos Electric”) is a generation and transmission cooperative that provides wholesale power supply to its sixteen (16) member-owner distribution cooperatives whose service territory extends throughout 68 Texas counties from the Texas Panhandle to Houston. Brazos Electric was organized in 1941 and was the first cooperative formed in the Lone Star State for the purpose of generating and supplying electrical power to member-owner cooperatives, including Bartlett Electric Cooperative, Comanche Electric Cooperative Association, PenTex Energy, CoServ Electric , Fort Belknap Electric Cooperative, Hamilton County Electric Cooperative Association, Heart of Texas Electric Cooperative, HILCO Electric Cooperative, JAC Electric Cooperative, Mid-South Electric Cooperative, Navarro County Electric Cooperative, Navasota Valley Electric Cooperative, South Plains Electric Cooperative, Cooperative Eléctrica Tri-Condado, United Cooperative Services and Wise Electric Cooperative. For more information visit www.brazoselectric.com.
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